Question
A company has an 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 0 1 2
A company has an 11% 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 | $131 | $131 | $131 | $131 | $131 | $131 | $0 |
What is each project's IRR? Do not round intermediate calculations. Round to two decimal places.
Project A:
Project B:
Calculate the crossover rate where the two projects' NPVs are equal. Do not round intermediate calculations. Round your answer to two decimal places.
What is each project's MIRR at a WACC of 18%? Do not round intermediate calculations. Round to two decimal places.
Project A:
Project B:
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Mergers Acquisitions And Other Restructuring Activities
Authors: Donald DePamphilis
10th Edition
0128150750, 978-0128150757
