A firm with a 14% WACC is evaluating two projects for this year's capital budget. After tax cash flows, induding depreciation, are as follows: 5 0 1 2 3 4 Project M Project N $12,000 $4,000 $4,000 $4,000 $4,000 $4,000 -$36,000 $11,200 $11,200 $11,200 $11,200 $11,200 a. Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations. Project M $ 1732.32 Project N$ 2450.51 Calculate IRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations. Project M 19.86 % Project N 16.80 % Calculate MIRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations Project M 17.12 % Project N 15.51 % Calculate payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations. Project M 3.00 years Project N 3.21 years Calculate discounted payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations Project M 4.17 years Project N 4.58 years b. Assuming the projects are independent, which one's) would you recommend? Both projects would be accepted since both of their NOV's are positive this Calculate IRR for each project. Round your answers to two decimal places. Do not round your intermediate Project M 19.86 % Project N 16.80 % Calculate MIRR for each project. Round your answers to two decimal places. Do not round your intermedia Project M 17.12 % Project N 15.51 % Calculate payback for each project. Round your answers to two decimal places. Do not round your interme Project M 3.00 years Project N 3.21 years Calculate discounted payback for each project. Round your answers to two decimal places. round yo Project M 4.17 years Project N 4.58 years b. Assuming the projects are independent, which one(s) would you recommend? Both projects would be accepted since both of their NPV's are positive. -Select- Only Project N would be accepted because NPV(N) > NPV(M). IRR is chosen. Accept Project N. Both projects would be accepted since both of thesr NPV's are positive. Only Project M would be accepted because IRR(M) > IRR(N). is there a conflict between NPV and IR Both projects would be rejected since both of their NPV's are negative. Only Project M would be accepted because NPV(M) > NPV(N). d. Grade it Now Save & Continue Project M 19.86 % Project N 16.80 % Calculate MIRR for each project. Round your answers to two decimal places. Do not round your intermediate ca Project M 17.12 % Project N 15.51 % Calculate payback for each project. Round your answers to two decimal places. Do not round your intermediate Project M 3.00 years Project N 3.21 years Calculate discounted payback for each project. Round your answers to two decimal places. Do not round your in Project M 4.17 years Project N 4.58 years b. Assuming the projects are independent, which one(s) would you recommend? Both projects would be accepted since both of their NPV's are positive. V c.If the projects.are.mutually.exclusive, which would you recommend2. If the projects are mutually exclusive, the project with the highest positive IRR is chosen. Accept Project W. -Select- d. KR? If the projects are mutually exclusive, the project with the highest positive IRR is chosen. 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 IRR is chosen. Accept Project N. If the projects are mutually exclusive, the project with the highest positive NPV is chosen. Accept Project N. Calculate MIRR for each project. Round your answers to two decimal places. Do not round your intermediate calc Project M 17.12 % Project N 15.51 % Calculate payback for each project. Round your answers to two decimal places. Do not round your intermediate Project M 3.00 years Project N 3.21 years Calculate discounted payback for each project. Round your answers to two decimal places. Do not round your inte Project M 4.17 years Project N 4.58 years b. Assuming the projects are independent, which one(s) would you recommend? Both projects would be accepted since both of their NPV's are positive. V 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 chosen. Accept Project N. 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 to the 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 flows, 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
