11. Project L requires an initial outlay at t = 0 of $35,000, its expected cash inflows are $12,000 per year for 9 years, and its WACC is 12%. What is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. $

12. Project L requires an initial outlay at t = 0 of $59,591, its expected cash inflows are $10,000 per year for 9 years, and its WACC is 10%. What is the project's IRR? Round your answer to two decimal places.

13. Project L requires an initial outlay at t = 0 of $55,000, its expected cash inflows are $10,000 per year for 9 years, and its WACC is 10%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places. %

14. Project L requires an initial outlay at t = 0 of $50,000, its expected cash inflows are $11,000 per year for 8 years, and its WACC is 9%. What is the project's payback? Round your answer to two decimal places. years

15. A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5 Project 1 -$200 $80 $80 $80 $215 $215 Project 2 -$550 $250 $250 $150 $150 $150 Which project would you recommend? Select the correct answer. a. Neither Project 1 nor 2, since each project's NPV < 0. b. Project 2, since the NPV2 > NPV1. c. Both Projects 1 and 2, since both projects have NPV's > 0. d. Project 1, since the NPV1 > NPV2. e. Both Projects 1 and 2, since both projects have IRR's > 0.

16. Project S requires an initial outlay at t = 0 of $12,000, and its expected cash flows would be $4,500 per year for 5 years. Mutually exclusive Project L requires an initial outlay at t = 0 of $25,500, and its expected cash flows would be $14,600 per year for 5 years. If both projects have a WACC of 14%, which project would you recommend? Select the correct answer. a. Both Projects S and L, since both projects have NPV's > 0. b. Both Projects S and L, since both projects have IRR's > 0. c. Project S, since the NPVS > NPVL. d. Project L, since the NPVL > NPVS. e. Neither Project S nor L, since each project's NPV < 0.

17. A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 Project S -$1,000 $883.93 $240 $5 $15 Project L -$1,000 $5 $240 $380 $859.64 The company's WACC is 8.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places. %

18. Not Answered 20.Not Answered Question Workspace Check My Work (3 remaining) eBook An oil-drilling company must choose between two mutually exclusive extraction projects, and each requires an initial outlay at t = 0 of $11 million. Under Plan A, all the oil would be extracted in 1 year, producing a cash flow at t = 1 of $13.2 million. Under Plan B, cash flows would be $1.9546 million per year for 20 years. The firm's WACC is 12.9%. Construct NPV profiles for Plans A and B. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. If an amount is zero, enter "0". Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to two decimal places. Discount Rate NPV Plan A NPV Plan B 0 % $ million $ million 5 million million 10 million million 12 million million 15 million million 17 million million 20 million million Identify each project's IRR. Do not round intermediate calculations. Round your answers to two decimal places. Project A: % Project B: % Find the crossover rate. Do not round intermediate calculations. Round your answer to two decimal places. % Is it logical to assume that the firm would take on all available independent, average-risk projects with returns greater than 12.9%? -Select- If all available projects with returns greater than 12.9% have been undertaken, does this mean that cash flows from past investments have an opportunity cost of only 12.9%, because all the company can do with these cash flows is to replace money that has a cost of 12.9%? -Select- Does this imply that the WACC is the correct reinvestment rate assumption for a project's cash flows? -Select-

19. A store has 5 years remaining on its lease in a mall. Rent is $2,000 per month, 60 payments remain, and the next payment is due in 1 month. The mall's owner plans to sell the property in a year and wants rent at that time to be high so that the property will appear more valuable. Therefore, the store has been offered a "great deal" (owner's words) on a new 5-year lease. The new lease calls for no rent for 9 months, then payments of $2,500 per month for the next 51 months. The lease cannot be broken, and the store's WACC is 12% (or 1% per month). Should the new lease be accepted? (Hint: Be sure to use 1% per month.) -Select- If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and old leases? (Hint: Find FV of the old lease's original cost at t = 9; then treat this as the PV of a 51-period annuity whose payments represent the rent during months 10 to 60.) Do not round intermediate calculations. Round your answer to the nearest cent. $ The store owner is not sure of the 12% WACCit could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases? (Hint: Calculate the differences between the two payment streams; then find its IRR.) Do not round intermediate calculations. Round your answer to two decimal places.

20. Question Workspace Check My Work (3 remaining) eBook A project has annual cash flows of $3,000 for the next 10 years and then $8,000 each year for the following 10 years. The IRR of this 20-year project is 13.52%. If the firm's WACC is 11%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. $