What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. Project A $ Project B S What is each project's IRR? Round your answer to two decimal places. Project A Project B What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Round your answer to two decimal places. Do not round your intermediate calculations. Project A _96 Project B 96 96 From your answers to parts a-c, which project would be selected? Answwer: Project A If the WACC was 18%, which project would be selected? Answer: Project B Construct NPV profiles for Projects A and B. Round your answers to the nearest cent. Do not round your intermediate calculations. Negative value should be indicated by a minus sign.
What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. Project A $ Project B S What is each project's IRR? Round your answer to two decimal places. Project A Project B What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Round your answer to two decimal places. Do not round your intermediate calculations. Project A _96 Project B 96 96 From your answers to parts a-c, which project would be selected? Answwer: Project A If the WACC was 18%, which project would be selected? Answer: Project B Construct NPV profiles for Projects A and B. Round your answers to the nearest cent. Do not round your intermediate calculations. Negative value should be indicated by a minus sign.
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
Related questions
Question
Please show all parts or skip it I'll definitely rate for complete answer and negative if not complete
Transcribed Image Text:A company has a 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:
01234567
Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180
Project B
-$405 $133 $133 $133 $133 $133 $133 $0
What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
Project A $
Project B $
What is each project's IRR? Round your answer to two decimal places.
Project A
Project B
What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Round your answer to two decimal places. Do not round your intermediate calculations.
Project A
Project B
Discount Rate
From your answers to parts a-c, which project would be selected?
Answwer: Project A
If the WACC was 18%, which project would be selected?
Answer: Project B
Construct NPV profiles for Projects A and B. Round your answers to the nearest cent. Do not round your intermediate calculations. Negative value should be indicated by a minus
sign.
0%
5
10
12
15
18.1
%
%
23.65
%
%
NPV Project A
$
S
S
S
S
S
S
NPV Project B
$
$
$
$
$
$
$
Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to two decimal places. Do not round your intermediate calculations.
%
What is each project's MIRR at a WACC of 18% ? Round your answer to two decimal places. Do not round your intermediate calculations.
Project A
Project B
%
%
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