A firm with a 14% WACC is evaluating two projects for this years capital budget. After-tax cash
Question:
A firm with a 14% WACC is evaluating two projects for this year’s capital budget. After-tax cash flows are as follows:
a. Calculate NPV, IRR, MIRR, payback, and discounted payback for each project.
b. Assuming the projects are independent, which one(s) would you recommend?
c. If the projects are mutually exclusive, which would you recommend?
d. Notice that the projects have the same cash flow timing pattern. Why is there a conflict between NPV and IRR?
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a Project M NPV 216540 IRR 1900 MIRR 1400 assuming the same reinvestment rate as the WACC Payback 2 ...View the full answer
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Related Book For 
Fundamentals Of Financial Management
ISBN: 9780357517574
16th Edition
Authors: Eugene F. Brigham, Joel F. Houston
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