A company has an 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows
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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: $
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What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places.
Project A: %
Project B: %
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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: %
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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
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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 | NPV Project A | NPV Project B |
0% | $ | $ |
5 | | |
10 | | |
12 | | |
15 | | |
18.1 | | |
24.29 | | |
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Calculate the crossover rate where the two projects' NPVs are equal. Do not round intermediate calculations. Round your answer to two decimal places.
%
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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: %