You are considering the projects below and can take only one. Your cost of capital is...

  

 

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You are considering the projects below and can take only one. Your cost of capital is 11%. Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. a. What is the NPV of each project at your cost of capital? b. What is the IRR of each project? c. At what cost of capital are you indifferent between the two projects? d. What should you do? 0 1 2 3 4 Project A S -100 S 25 S 30 S 40 S 50 Project B S -100 S 50 S 40 S 30 S 20 Cost of capital 11% a. What is the NPV of each project at your cost of capital? NPV project A NPV project B b. What is the IRR of each project? IRR project A IRR project B c. At what cost of capital are you indifferent between the two projects? Projects A - B IRR of difference d. What should you do? You should invest in project: 1 2 3 You are considering the projects below and can take only one. Your cost of capital is 11%. Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. a. What is the NPV of each project at your cost of capital? b. What is the IRR of each project? c. At what cost of capital are you indifferent between the two projects? d. What should you do? 0 1 2 3 4 Project A S -100 S 25 S 30 S 40 S 50 Project B S -100 S 50 S 40 S 30 S 20 Cost of capital 11% a. What is the NPV of each project at your cost of capital? NPV project A NPV project B b. What is the IRR of each project? IRR project A IRR project B c. At what cost of capital are you indifferent between the two projects? Projects A - B IRR of difference d. What should you do? You should invest in project: 1 2 3