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Your firm is considering two equally risky projects, Alpha and Beta, with the incremental cash flows listed in the table below. The WACC is 12.00% . Year Project Alpha Project Beta -500,000 -500,000 1 -10,000 200,000 2 200,000 -40,000 3 300,000 300,000 4 200,000 40,000 150,000 150,000 6 -100,000 75,000 A. What is the NPV of each project? Round to the nearest dollar. B. What is the MIRR of the better project? Record your answer in percentage and to two decimal places.

Your firm is considering two equally risky projects, Alpha and Beta, with the incremental cash flows listed in the table below. The WACC is 12.00% . Year Project Alpha Project Beta -500,000 -500,000 1 -10,000 200,000 2 200,000 -40,000 3 300,000 300,000 4 200,000 40,000 150,000 150,000 6 -100,000 75,000 A. What is the NPV of each project? Round to the nearest dollar. B. What is the MIRR of the better project? Record your answer in percentage and to two decimal places.

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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Your firm is considering two equally risky projects, Alpha and Beta, with the incremental cash flows listed in the table below. The WACC is 12.00% . Year Project Alpha Project Beta -500,000 -500,000 1 -10,000 200,000 2 200,000 -40,000 3 300,000 300,000 200,000 40,000 5 150,000 150,000 6 -100,000 75,000 A. What is the NPV of each project? Round to the nearest dollar. B. What is the MIRR of the better project? Record your answer in percentage and to two decimal places.
Transcribed Image Text:Your firm is considering two equally risky projects, Alpha and Beta, with the incremental cash flows listed in the table below. The WACC is 12.00% . Year Project Alpha Project Beta -500,000 -500,000 1 -10,000 200,000 2 200,000 -40,000 3 300,000 300,000 200,000 40,000 5 150,000 150,000 6 -100,000 75,000 A. What is the NPV of each project? Round to the nearest dollar. B. What is the MIRR of the better project? Record your answer in percentage and to two decimal places.
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