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
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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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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