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A company has 12% WACC and is considering two investments with the following cash flows: End of Year 0 1 2. 3 4 5 6

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A company has 12% WACC and is considering two investments with the following cash flows: End of Year 0 1 2. 3 4 5 6 Project A: -300 0 -100 -100 550 500 200 Project B: -300 134 134 134 134 134 134 a) What is each project's NPV? (2 points) b) What is each project's IRR? (2 points) c) What is each project's MIRR? (4 points) d) Assuming the projects are independent, which one should you recommend? (2 points) e) Assuming the projects are mutually exclusive, which one should you recommend? (2 points) 1) Assuming the projects are mutually exclusive, is the NPV rule consistent with IRR rule for capital budgeting decision? Explain by calculating the crossover rate where the two projects' NPV are equal. (3 points)

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