Question: wa watu A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 0

wa watu A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 0 1 2 3 5 6 7 + + + + + + H Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180 Praject B -$400 5133 133 $133 $133 $133 $0 $133 a. What is each project's NPV? Negative values, if any, should be indicated by a minus sign. Do not round Intermediate calculations. Round your answers to the nearest cent. Project A: S Project B: b. What is each project's IRR? Do nat round intermediate calculations. Round your answers to two decimal places Project A: Praject B: 96 c. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Do not round intermediate calculations. Round your answers to two decimal places. Project A: 96 Project B: d. From your answers to parts ac, which project would be selected? -Select- If the WACC was 18%, which project would be selected? -Select- c. Construct NPV profiles for Projects A and B. If an amount is zero, enter 0. Negative values, if any, should be indicated by a minus sign. De nat round intermediate calculations. Round your answers to the nearest cent. NPV Project A NPV Project B Discount Rate 0% 5 $ $ 10 12 15 18.1 24.18 . . f. Calculate the crossover rate where the two projects' NPVs are equal. Do not round intermediate calculations. Round your answer to two decimal places. % g. What is each project's MIRR at a WACC of 18%? Do not round intermediate calculations. Round your answers to two decimal places. Project A: Project B: 95
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
