2/7 12-7 a. Project A CFS-6000; CF. - 2000; I/YR = 14 Solve for NPVA - $866.16. IRRA - 19.86%. Using a financial calculator, enter N = 5; PV - 6000; PMT = 0; FV = 13220 21; and solve for MIRR = 1/R - 17.12% Payback calculation: Regular Paybacka = 3 years. Discounted payback calculation: Discounted Payback, = 4 + $172.57/51,038.74 = 4.17 years. Project B CF, = -18000; CF = 5600, I/YR = 14. Solve for NPV = $1,255.25. TRR, = 16.80%. MIRR calculation: Using a firtancial calculator, enter N = 5; PV = -1B000 59; arid alve for MIRR = 1/YR = 15.51%. Payback calculation: Regular Paybackg = 3 + $1,200/55,600 Discounted navarkalculation as Heren om Discounted payback calculation: Discounted Paybacka = 4 + $1,683,21/52,908.46 = 4.58 years, b. If the projects are independent, both projects would be accepted since both of their NPVs are positive. c. If the projects are mutually exclusive then only one project can be accepted, so the project with the highest positive NPV is chosen. Accept Project B. d. The conflict between NPV and IRR occurs due to the difference in the size of the projexts. Project B is 3 times larger than Project A 12-8 a. No mitigation analysis (in Millions of dollars); Using a financial calculator, enter the data as follows: Cho = -50; CF: = 20; 1/R = 12 Solve for NPV = $12.10 million and IRR = 19.86%. With mitigation analysis (in millions of dollars): Using a financial calculator, enter the data as follows: CF, =-70; CF4.5-21; 1/R = 12. Solve for NPV = $5.70 million and IRR = 15.24%. 12-9 a. No mitigation analysis (in Millions of dollars); 2 Integrated Case Chapter 12: The Basics of Capital Budgeting luminum Using a financial calculator, enter the data as follows: CF = -240; CF1: = 80; I/YR = 17. Solve for NPV = $15.95 million and IRR = 19.86% With mitigation analysis (in Millions of dollars): Using a financial calculator, enter the data as follows, CF =-280; F = = 84; T/YR = 17. Solve for NPV = -$11.25 million and IRR = 15.24%. 12-10 Project A: Using a financial calculator, enter the following data, CF, = -400; CF 1a = 55; CF. = = 225, T/YR = 10. Solve for NPV = $30.16. Project B: Using a financial calculator, enter the following data: CFu = -600; CF12= 300; C534 = 50; CFs = 49, 1/YR = 10. Solve for NPV = $22.80. In this situation, the firm would accept Project A since NPVA = $30.16 compared to NPV = $22.80 3/7 12-11 Project S: Using a financial calculator, enter the following data: CF, =-15000; CF = 4500; I/YR 14. NPV = $448.86. Project L: Using a financial Calculator, enter the following data: CFy 37500; CF 11100; 1/YR 14. NPV = $607.20 In this situation, the firm would accept Project L since NPV = $607.20 compared to NPVs = $448.86. 2/7 12-7 a. Project A CFS-6000; CF. - 2000; I/YR = 14 Solve for NPVA - $866.16. IRRA - 19.86%. Using a financial calculator, enter N = 5; PV - 6000; PMT = 0; FV = 13220 21; and solve for MIRR = 1/R - 17.12% Payback calculation: Regular Paybacka = 3 years. Discounted payback calculation: Discounted Payback, = 4 + $172.57/51,038.74 = 4.17 years. Project B CF, = -18000; CF = 5600, I/YR = 14. Solve for NPV = $1,255.25. TRR, = 16.80%. MIRR calculation: Using a firtancial calculator, enter N = 5; PV = -1B000 59; arid alve for MIRR = 1/YR = 15.51%. Payback calculation: Regular Paybackg = 3 + $1,200/55,600 Discounted navarkalculation as Heren om Discounted payback calculation: Discounted Paybacka = 4 + $1,683,21/52,908.46 = 4.58 years, b. If the projects are independent, both projects would be accepted since both of their NPVs are positive. c. If the projects are mutually exclusive then only one project can be accepted, so the project with the highest positive NPV is chosen. Accept Project B. d. The conflict between NPV and IRR occurs due to the difference in the size of the projexts. Project B is 3 times larger than Project A 12-8 a. No mitigation analysis (in Millions of dollars); Using a financial calculator, enter the data as follows: Cho = -50; CF: = 20; 1/R = 12 Solve for NPV = $12.10 million and IRR = 19.86%. With mitigation analysis (in millions of dollars): Using a financial calculator, enter the data as follows: CF, =-70; CF4.5-21; 1/R = 12. Solve for NPV = $5.70 million and IRR = 15.24%. 12-9 a. No mitigation analysis (in Millions of dollars); 2 Integrated Case Chapter 12: The Basics of Capital Budgeting luminum Using a financial calculator, enter the data as follows: CF = -240; CF1: = 80; I/YR = 17. Solve for NPV = $15.95 million and IRR = 19.86% With mitigation analysis (in Millions of dollars): Using a financial calculator, enter the data as follows, CF =-280; F = = 84; T/YR = 17. Solve for NPV = -$11.25 million and IRR = 15.24%. 12-10 Project A: Using a financial calculator, enter the following data, CF, = -400; CF 1a = 55; CF. = = 225, T/YR = 10. Solve for NPV = $30.16. Project B: Using a financial calculator, enter the following data: CFu = -600; CF12= 300; C534 = 50; CFs = 49, 1/YR = 10. Solve for NPV = $22.80. In this situation, the firm would accept Project A since NPVA = $30.16 compared to NPV = $22.80 3/7 12-11 Project S: Using a financial calculator, enter the following data: CF, =-15000; CF = 4500; I/YR 14. NPV = $448.86. Project L: Using a financial Calculator, enter the following data: CFy 37500; CF 11100; 1/YR 14. NPV = $607.20 In this situation, the firm would accept Project L since NPV = $607.20 compared to NPVs = $448.86