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You must analyze two projects, X and Y. Each project costs $10,000 and the firm's WACC is 14%. The expected cash flows are as follows: 1. 2 3 4 Project X Project Y -20000 -20000 11000 7000 6000 5000 8000 7500 7000 6500 (a.) (b.) (c.) (d.) Calculate each project X's NPV, MIRR, and discounted payback. Calculate each project Y's IRR and payback. Which project(s) should be accepted if they are independent? Which project(s) should be accepted if they are mutually exclusive?

You must analyze two projects, X and Y. Each project costs $10,000 and the firm's WACC is 14%. The expected cash flows are as follows: 1. 2 3 4 Project X Project Y -20000 -20000 11000 7000 6000 5000 8000 7500 7000 6500 (a.) (b.) (c.) (d.) Calculate each project X's NPV, MIRR, and discounted payback. Calculate each project Y's IRR and payback. Which project(s) should be accepted if they are independent? Which project(s) should be accepted if they are mutually exclusive?

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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You must analyze two projects, X and Y. Each project costs $10,000 and the firm's WACC is 14%. The expected cash flows are as follows: 1. 2 3 4 Project X Project Y -20000 11000 7000 6000 5000 -20000 8000 7500 7000 6500 (a.) (b.) (c.) (d.) Calculate each project X's NPV, MIRR, and discounted payback. Calculate each project Y's IRR and payback. Which project(s) should be accepted if they are independent? Which project(s) should be accepted if they are mutually exclusive?
Transcribed Image Text:You must analyze two projects, X and Y. Each project costs $10,000 and the firm's WACC is 14%. The expected cash flows are as follows: 1. 2 3 4 Project X Project Y -20000 11000 7000 6000 5000 -20000 8000 7500 7000 6500 (a.) (b.) (c.) (d.) Calculate each project X's NPV, MIRR, and discounted payback. Calculate each project Y's IRR and payback. Which project(s) should be accepted if they are independent? Which project(s) should be accepted if they are mutually exclusive?
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