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A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 0 1 2

A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:

0 1 2 3 4 5 6 7
Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180
Project B -$400 $132 $132 $132 $132 $132 $132 $0
  1. What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.

    Project A $

    Project B $

  2. What is each project's IRR? Round your answer to two decimal places.

    Project A %

    Project B %

  3. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Round your answer to two decimal places. Do not round your intermediate calculations.

    Project A %

    Project B %

  4. From your answers to parts a-c, which project would be selected? -Select-Project AProject BItem 7 If the WACC was 18%, which project would be selected? -Select-Project AProject BItem 8
  5. 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
    0% $ $
    5
    10
    12
    15
    18.1
    23.86
  6. Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to two decimal places. Do not round your intermediate calculations. %
  7. What is each project's MIRR at a WACC of 18%? Round your answer to two decimal places. Do not round your intermediate calculations.

    Project A %

    Project B %

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