11. Last month, Lloyd's Systems analyzed the project whose cash flows are shown below.However, before the decision to accept or reject the project took place, the Federal Reserve changed interest rates and therefore the firm's WACC.The Fed's action did not affect the forecasted cash flows.By how much did the change in the WACC affect the project's forecasted NPV?Note that a project's expected NPV can be negative, in which case it should be rejected.

Old WACC:10.00% New WACC:11.25%

Year 0 1 2 3

_____________________________

Cash flows -$1,000 $410 $410 $410

a. -$18.89 b. -$19.88 c. -$20.93 d. -$22.03 e. -$23.13

12. Lasik Vision Inc. recently analyzed the project whose cash flows are shown below.However, before Lasik decided to accept or reject the project, the Federal Reserve changed interest rates and therefore the firm's WACC.The Fed's action did not affect the forecasted cash flows.By how much did the change in the WACC affect the project's forecasted NPV? Note that a project's expected NPV can be negative, in which case it should be rejected.

Old WACC:8.00% New WACC:11.25%

Year 0 1 2 3

_____________________________

Cash flows -$1,000 $410 $410 $410

a. -$59.03 b. -$56.08 c. -$53.27 d. -$50.61 e. -$48.08

13. Ehrmann Data Systems is considering a project that has the following cash flow and WACC data.What is the project's MIRR?Note that a project's MIRR can be less than the WACC (and even negative), in which case it will be rejected.

WACC:10.00%

Year 0 1 2 3

_____________________________

Cash flows -$1,000 $450 $450 $450

a.9.32% b. 10.35% c. 11.50% d. 12.78% e. 14.20%

14. Ingram Electric Products is considering a project that has the following cash flow and WACC data.What is the project's MIRR?Note that a project's MIRR can be less than the WACC (and even negative), in which case it will be rejected.

WACC:11.00%

Year 0 1 2 3

_____________________________

Cash flows -$800 $350 $350 350

a.8.86% b.9.84% c. 10.94% d. 12.15% e. 13.50%

15. Malholtra Inc. is considering a project that has the following cash flow and WACC data.What is the project's MIRR?Note that a project's MIRR can be less than the WACC (and even negative), in which case it will be rejected.

WACC:10.00%

Year 0 1 2 3 4

______________________________________

Cash flows -$850 $300 $320 $340 $360

a. 14.08% b. 15.65% c. 17.21% d. 18.94% e. 20.83%