A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:

0

1

2

4

5

6

7

Project A

Project B

• $300
• $405
• $387

$133

• $193
• $100 $600

$600

$133

$133

$133

$133

$850

$133

-$180 $0

1. 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: $
2. 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:

%

d. From your answers to parts a-c, which project would be selected?

-Select- a

If the WACC was 18%, which project would be selected?

-Select- a

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 0%

NPV Project A

NPV Project B

Discount Rate

NPV Project A

0%

NPV Project B

5

10

12

15

18.1

23.65

f. Calculate the crossover rate where the two projects' NPV are equal. Do not round intermediate calculations. Round your answer to two decimal places.

0/o

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:

%