Question: You have been asked to analyze two mutually exclusive projects. Expected Cash Flow Expected Cash Flows Year Project A Project B 0 -171,000 -44,500 1

You have been asked to analyze two mutually exclusive projects.

Expected Cash Flow Expected Cash Flows
Year Project A Project B
0 -171,000 -44,500
1 -81,000 12,500
2 -14,500 14,000
3 31,500 16,550
4 90,500 20,000
5 122,500 21,500
6 167,000 23,500
7 202,000 26,000
8 265,000 33,000
9 325,000 42,000

a) Construct the NPV profiles for Project A and Project B. (Note: plot the NPVs of both projects on the same graph.) The cost of capital ranges from 0% to 30% by increments of 2%.

b) Calculate each projects IRR

c) Calculate the crossover rate of the two projects.

d) Calculate each projects MIRR at a cost of capital of 14% and reinvestment rate of 10%.

e) Calculate each projects regular payback period.

f) Calculate each projects discounted payback period with a cost of capital of 14%.

g) Calculate each projects profitability index at a cost of capital of 14%.

h) Calculate each projects NPV at a required rate of return of 14%.

i) Calculate each projects NPV at a required rate of return of 28%.

Please solve using excel and show formulas.

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