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	-$405	$134	$134	$134	$134	$134	$134	$0

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.

Spreadsheet data :

Capital budgeting criteria
WACC	13.00%
		0	1	2	3	4	5	6	7
Project A		-$300	-$387	-$193	-$100	$600	$600	$850	-$180
Project B		-$405	$134	$134	$134	$134	$134	$134	$0
Project MIRR Calculations:
Alternatively, MIRRA can be calculated as:
		0	1	2	3	4	5	6	7
Project A		-$300	-$387	-$193	-$100	$600	$600	$850	-$180
	Formulas
N	7	Formulas
PV	$0.00
PMT	0
FV	$0.00
I/YR = MIRRA		#N/A
MIRRB		#N/A
Alternatively, MIRRB can be calculated as:
		0	1	2	3	4	5	6	7
Project B		-$405	$134	$134	$134	$134	$134	$134	$0
Sum of Outflow PVs	#N/A									#N/A
N	7	Formulas
PV	$0.00
PMT	0
FV	$0.00
I/YR = MIRRB		#N/A
Project Acceptance:
WACC	13.00%
Accept		#N/A
WACC	18.00%
NPVA	$2.66
NPVB	$63.68
Accept		#N/A
NPV Profiles:
Discount Rates	NPVA	NPVB			Discount Rates	NPVA	NPVB
	$2.66	$63.68				$2.66	$63.68
0%					0%	#N/A	#N/A
5.00%					5.00%	#N/A	#N/A
10.00%					10.00%	#N/A	#N/A
12.00%					12.00%	#N/A	#N/A
15.00%					15.00%	#N/A	#N/A
18.10%					18.10%	#N/A	#N/A
23.97%					23.97%	#N/A	#N/A
Calculation of Crossover Rate:
		0	1	2	3	4	5	6	7
Project A		-$300	-$387	-$193	-$100	$600	$600	$850	-$180
Project B		-$405	$134	$134	$134	$134	$134	$134	$0
Project Delta
		#N/A	#N/A	#N/A	#N/A	#N/A	#N/A	#N/A	#N/A
Crossover Rate = IRR		#N/A
Project MIRR Calculations at WACC = 18%
WACC	18.00%
MIRRA		#N/A
MIRRB		#N/A

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?

   _________Project AProject B

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

   _________Project AProject B

6. 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	$	$
   23.97	$	$

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

   %

8. 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: %