A company has an 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:

***Please USE Financial Calculator formula like(N,I/Y,PV,PMT,FV)

DO NOT use excel

1. What is each projects NPV?

2. What is each projects IRR?

3. What is each projects MIRR? (Hint: Consider Period 7 as the end of Project Bs life.)

4. From your answers to parts a, b, and c, which project would be selected? If the WACC was 18%, which project would be selected?

5. Construct NPV profiles for Projects A and B.

6. Calculate the crossover rate where the two projects NPVs are equal.

7. What is each projects MIRR at a WACC of 18%?

2 4 6 Project A -$300 -$387 193-$100 $600 $600 $850-$180 Project B -$405 $134 $134 $134 $134 $134 $134 $o