Question
A firm with a 14% WACC is evaluating two projects for this year's capital budget. After tax cash flows, including depreciation are as follows; Project
A firm with a 14% WACC is evaluating two projects for this year's capital budget. After tax cash flows, including depreciation are as follows;
Project A: -$600, $2000, $2000, $2000, $2000, $2000
Project B: -$18000,$5600, $5600,$5600, $5600,$5600
A. Calculate NPV,IRR,MIRR and discounted payback for ea. projcet.
B. Assuming the projcets are independent which one would you recommend?
C. If the projcets are mutually exclusive, which would you recomment?
D. Notice that the projects have the same cash flow timing pattern. Why is there a conflict between NPV and IRR?
(problem 11-7)
Please show step by step I prefer a step by step for a Financial calculator HP10bll+ Thanks, :)
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Public Finance
Authors: John E. Anderson
2nd edition
978-0538478441, 538478446, 978-1133708360, 1133708366, 978-1111526986
