A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 01234 Project S-$1,000$869.10$260$5$10Project L-$1,000$0$250$420$831.87 The company's WACC is 8.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.

A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 01234 Project S-$1,000$869.10$260$5$10Project L-$1,000$0$250$420$831.87 The company's WACC is 8.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Can you answer part b of this question
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: Project S Project L 0 % 1 2 3 4 H $10 $788.16 -$1,000 $884.88 $260 $5 -$1,000 $0 $260 $380 The company's WACC is 8.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.
XYZ Corporation evaluates two projects. Projects x and y; the below table shows their cash flows. These projects are mutually exclusive, equally risky and are not repeatable. If the decision is made by choosing the Project with the higher IRR, how much value will be forgone? Wacc %8 0 1 2 3 4 CF(X) ($1,050) $675 $650 CF(Y) ($1,050) $360 $360 $360 $360 a. IRR of Project X: %.......... b. IRR of Project Y: %.......... c. NPV of Project X: $............ d. NPV of Project Y: $............ e. The Value forgone: $..............
Barry Inc. is considering a project that has the following cash flow and WACC data. What is the project's MIRR?WACC = 12.85% Year 0 1 2 3 4 5 CFs -$35,600 10,100 20,200 30,300 40,400 50,500 `
Robinson Robotics is considering two mutually exclusive projects, Project A and Project B. The projects have the following cash flows: Year Project A Cash Flow Project B Cash Flow 0 -$200 -$300 1 20 90 2 30 70 3 40 60 4 50 50 5 60 40 At what cost of capital would the two projects have the same net present value (NPV)? 12.69% 9.32% 10.32% 8.14% None of the above
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 1 2 4 Project S -$1,000 $871.53 $260 $10 $10 Project L -$1,000 $0 $260 $400 $766.36 The company's WACC is 10.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places. 11.90 %
howell petroleum, incorporatred, is trying to evaluate a generation project with the following cash flows: year 0 -39,300,000 year 1 63,300,000 year 2 -12,300,000 What is the NPV for the project if hte company requires a return of 12 percent? this project has two irr what are they
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Bates & Reid, LLC, has identified two mutually exclusive projects, A and B. Project A has a NPV of $14,050.47. Project B has cash flows as described below. Year Cash Flow B 0 -$77,000 1 35,000 2 25,000 3 25,000 4 25,000 If the WACC is 8%, then B’s NPV is _______ and therefore the firm should accept _________ $11,337.55; project B because NPVA > NPVB. $15,062.43; project B because NPVA < NPVB. $15,062.43; project A because NPVA < NPVB. The projects are equally profitable. $11,337.55; project A because NPVA > NPVB.
Central Energy is considering two mutually exclusive projects, Project Red and Project The projects have the following cash flows: Project Red Project White Year Cash Flows Cash Flows -$1,000 -$1,000 1 100 700 2 200 400 600 200 4 800 100 Assume that both projects have a 10 percent WACC. At what weighted average cost of capital would the two projects have the same net present value? 20.04% 0.00% 14.30% 10.00% 24.96%

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