The answers of a-d already existed still need to find the other questions Question A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180 Project B -$400 $135 $135 $135 $135 $135 $135 $0 a. What is each project's NPV? project A :$200.41 project B :$155.04 b. What is each project's IRR? project A :18.10% project B :24.83% c. What is each project's MIRR? project A :15.1% project B :17.4% d. From your answers to Parts a, b, and c, which project would be selected? If the WACC was 18%, which project would be selected? Already answered e. Construct NPV profiles for Projects A and B discount rate NPV PLAN B. NPV PLAN B Discount Rate NPV Project A NPV Project B 0% $ $ 5 10 12 15 18.1 24.83 Formula: f. Calculate the crossover rate where the two projects' NPVs are equal. Formula: g. What is each project's MIRR at a WACC of 18% Formula:
The answers of a-d already existed still need to find the other questions Question A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180 Project B -$400 $135 $135 $135 $135 $135 $135 $0 a. What is each project's NPV? project A :$200.41 project B :$155.04 b. What is each project's IRR? project A :18.10% project B :24.83% c. What is each project's MIRR? project A :15.1% project B :17.4% d. From your answers to Parts a, b, and c, which project would be selected? If the WACC was 18%, which project would be selected? Already answered e. Construct NPV profiles for Projects A and B discount rate NPV PLAN B. NPV PLAN B Discount Rate NPV Project A NPV Project B 0% $ $ 5 10 12 15 18.1 24.83 Formula: f. Calculate the crossover rate where the two projects' NPVs are equal. Formula: g. What is each project's MIRR at a WACC of 18% Formula:
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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The answers of a-d already existed still need to find the other questions
Question
A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:
| Project A | -$300 | -$387 | -$193 | -$100 | $600 | $600 | $850 | -$180 |
| Project B | -$400 | $135 | $135 | $135 | $135 | $135 | $135 | $0 |
a. What is each project's NPV?
project A :$200.41
project B :$155.04
b. What is each project's
project A :18.10%
project B :24.83%
c. What is each project's MIRR?
project A :15.1%
project B :17.4%
d. From your answers to Parts a, b, and c, which project would be selected?
If the WACC was 18%, which project would be selected? Already answered
e. Construct NPV profiles for Projects A and B
discount rate NPV PLAN B. NPV PLAN B
| Discount Rate | NPV Project A | NPV Project B |
| 0% | $ | $ |
| 5 | ||
| 10 | ||
| 12 | ||
| 15 | ||
| 18.1 | ||
| 24.83 |
Formula:
f. Calculate the crossover rate where the two projects' NPVs are equal.
Formula:
g. What is each project's MIRR at a WACC of 18%
Formula:
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