Question
11.17 A company has an 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: a. What
11.17 A company has an 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:
a. What is each project's NPV? Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent.
Project A: ____ $
Project B: ____ $
b. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places.
Project A: ____ %
Project B: ____ %
c. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Do not round intermediate calculations. Round your answers to two decimal places.
Project A: ____ %
Project B: ____ %
e. Construct NPV profiles for Projects A and B. 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 the nearest cent.
Discount Rate | NPV Project A | NPV Project B |
0% | $ | $ |
5 | ||
10 | ||
12 | ||
15 | ||
18.1 | ||
24.29 |
f. Calculate the crossover rate where the two projects' NPVs are equal. Do not round intermediate calculations. Round your answer to two decimal places.
______ %
g. What is each project's MIRR at a WACC of 18%? Do not round intermediate calculations. Round your answers to two decimal places.
Project A: ____ %
Project B: ____ %
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