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A company has a 1 1 % WACC and is considering two mutually exclusive investments ( that cannot be repeated ) with the following cash
A company has a WACC and is considering two mutually exclusive investments that cannot be repeated with the following cash flows:
Project A $$$$ $ $ $$
Project B $ $ $ $ $ $ $ $
The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.
a What is each project's NPV Round your answer to the nearest cent. Do not round your intermediate calculations.
Project A: $
Project B: $
b What is each project's IRR? Round your answer to two decimal places.
Project A:
Project B:
c What is each project's MIRR? Hint: Consider Period as the end of Project Bs life. Round your answer to two decimal places. Do not round your intermediate calculations.
Project A:
Project B:
d From your answers to parts ac which project would be selected?
Project A or Project B
d If the WACC was which project would be selected?
Project A or Project B
e Construct NPV profiles for Projects A and B Round your answers to the nearest cent. Do not round your intermediate calculations. Negative value should be indicated by a minus sign.
Discount Rate NPV Project A NPV Project B
$ $
$ $
$ $
$ $
$ $
$ $
$ $
f Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to two decimal places. Do not round your intermediate calculations.
g What is each project's MIRR at a WACC of Round your answer to two decimal places. Do not round your intermediate calculations.
Project A:
Project B:
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