A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: Project M $30,000 $10,000 $10,000 $10,000 $10,000 $10,000 Project N $90,000 $28,000 $28,000 $28,000 $28,000 $28,000 a. Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations Project M Project N Calculate 1RR for each project. Round your answers to two decimal places. Do not round your intermediate calculations. Project M Project N Calculate MIRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations. Project M Project N Calculate payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations. Project M Project N years years Calculate discounted payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations Project M years Project N years Calculate IRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations Project M Project N Calculate MIRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations Project M Project N Calculate payback for each project. Round your answers to two decimal places. Do not round your intermediate calculati Project M Project N years years Calculate discounted payback for each project. Round your answers to two decimal places. Do not round your intermediat Project M Project N years years b. Assuming the projects are independent, which one(s) would you recommend? Only Project N would be accepted because NPV(N)> NPV(M). Both projects would be accepted since both of their NPV's are positive. Only Project M would be accepted because IRR(M)IRR(N) Both projects would be rejected since both of their NPV's are negative. Only Project M would be accepted because NPV(M)>NPVN) end? C. h. Why is there a conflict between NPV and IRR? d. Select roject M N 04% Project Calculate MIRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations. Project M Project N Calculate payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations. Project M Project N years years Calculate discounted payback for each project. Round your answers to two decimal places. Do not round your intermediate calcu Project NM years Project N Assuming the projects are independent, which one(s) would you recommend? years Select c. If the projects are mutually exclusive, which would you recommend? If the projects are mutually exclusive, the project with the highest positive IRR is hosen. Accept Project M If the projects are mutually exclusive, the project with the highest positive MIRR is chosen. Accept Project M. If the projects are mutually exclusive, the project with the shortest Payback Period is chosen. Accept Project M. If the projects are mutually exclusive, the project with the highest positive RR is chosen. Accept Project N. |NPV and IRR? . e 0ect with the highest postrve NpV 1s chosen. Accept Project N Grade It Now Save & Continue Session Calculate payback for each project. Round your answers to two decimal places. Do not round your intermediate calculation Project M Project N years years Calculate discounted payback for each project. Round your answers to two decimal places. Do not round your intermediate Project M Project N years years b. Assuming the projects are independent, which one(s) would you recommend? c. If the projects are mutually exclusive, which would you recommend? d. Notice that the projects have the same cash flow timing pattern. Why is there a conflict between NPV and IRR? Select Select The conflict between NPV and IRR is due toe relatively high discount rate The conflict between NPV and IRR is due to the fact that the cash flows are in the form of an annuity The conflict between NPV and IRR is due to the difference in the timing of the cash flews. There is no conflict between NPV and IRR. The conflict between NPV and IRR occurs due to the difference in the size of the projects. Grade It Now Save & Continue Ses Tim Continue without saving
