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(55 points) You are a financial analyst for Carbora Corp. The director of Capital budgeting has asked you to analyze two proposed capital investments, Projects
(55 points) You are a financial analyst for Carbora Corp. The director of Capital budgeting has asked you to analyze two proposed capital investments, Projects Orzala and Quince. Each project has a cost of $10,000, and the required rate of return for each project is 9 percent. The project's expected net cash flows are as follows: a. (10 points) Calculate each project's net present value (NPV), internal rate of return (IRR), and traditional payback period (PB). b. (10 points) Calculate each project's discounted PB. c. (10 points) These two projects are mutually exclusive. What is the IRR of the better project? (Hint: Note that the better project might not be the one with the higher IRR) d. (10 points) Do the IRR and NPV recommendations align in (c)? Calculate the modified IRR (MIRR) for each project. Does the MIRR and NPV recommendations align? e. (15 points) Define the crossover rate and how we might use that rate to make decisions. Find the crossover rate for this
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