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CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 1 3 4 5 Project M Project N -$30,000 -$90,000 + $10,000 $28,000 + $10,000 $28,000 + $10,000 $28,000 $10,000 $28,000 $10,000 $28,000 a. Calculate NPV, IRR, MIRR, payback, and tistountedprvk for each project. b. Assuming the projects are independent, which one(s) would you recommend?

CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 1 3 4 5 Project M Project N -$30,000 -$90,000 + $10,000 $28,000 + $10,000 $28,000 + $10,000 $28,000 $10,000 $28,000 $10,000 $28,000 a. Calculate NPV, IRR, MIRR, payback, and tistountedprvk for each project. b. Assuming the projects are independent, which one(s) would you recommend?

Essentials Of Investments
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
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Please show the solution on excel spreadsheet and please indicate the formulas used. Thank you. 

**11-7 CAPITAL BUDGETING CRITERIA** A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: **Year:** - **0** - **1** - **2** - **3** - **4** - **5** **Project M:** - Year 0: \(-\$30,000\) - Year 1: \$10,000 - Year 2: \$10,000 - Year 3: \$10,000 - Year 4: \$10,000 - Year 5: \$10,000 **Project N:** - Year 0: \(-\$90,000\) - Year 1: \$28,000 - Year 2: \$28,000 - Year 3: \$28,000 - Year 4: \$28,000 - Year 5: \$28,000 a. Calculate NPV, IRR, MIRR, payback, and discounted payback for each project. b. Assuming the projects are independent, which one(s) would you recommend? *Note: You can use an Excel formula for calculating npv, irr, mirr.*
Transcribed Image Text:**11-7 CAPITAL BUDGETING CRITERIA** A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: **Year:** - **0** - **1** - **2** - **3** - **4** - **5** **Project M:** - Year 0: \(-\$30,000\) - Year 1: \$10,000 - Year 2: \$10,000 - Year 3: \$10,000 - Year 4: \$10,000 - Year 5: \$10,000 **Project N:** - Year 0: \(-\$90,000\) - Year 1: \$28,000 - Year 2: \$28,000 - Year 3: \$28,000 - Year 4: \$28,000 - Year 5: \$28,000 a. Calculate NPV, IRR, MIRR, payback, and discounted payback for each project. b. Assuming the projects are independent, which one(s) would you recommend? *Note: You can use an Excel formula for calculating npv, irr, mirr.*
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