Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 7%. 0 1 2 3 4 -1,250 Project A Project B -1,250 What is Project A's MIRR? Do not round intermediate calculations. Round your answer to two decimal places. % 600 200 % 430 365 270 420 320 770 What is Project B's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects'
after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these
cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 7%.
1
2
3
4
Project A
-1,250
Project B -1,250
What is Project A's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.
%
0
%
600
200
430
365
270
420
320
770
What is Project B's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.
Transcribed Image Text:Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 7%. 1 2 3 4 Project A -1,250 Project B -1,250 What is Project A's MIRR? Do not round intermediate calculations. Round your answer to two decimal places. % 0 % 600 200 430 365 270 420 320 770 What is Project B's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.
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