Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Answer the incorrect boxes please & thank you! A company has a 11% WACC and is considering two mutually exclusive investments (that cannot be repeated)

Answer the incorrect boxes please & thank you!
image text in transcribed
image text in transcribed
A company has a 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: The data has been collected in the Microsoft Excel Online file below, Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. Project A: $ Project B: $ b. What is each project's IRR? Round your answer to two decimal places. Prolect A: % Project B: c. What is each project's MIRR? (Hint: Conslder Period 7 as the end of Project B's life.) Round your answer to two decimal places, Do not round your internediate calculations. Project A: \% Project B: % d. From your answers to parts a-c, which project would be selected? If the wacc was 18%, which profect would be selected? \begin{tabular}{|c|c|c|c|c|} \hline Discosint Pate & \multicolumn{2}{|c|}{ NPV Proiect A } & \multicolumn{2}{|c|}{ NPV Prolect B } \\ \hline 0% & $ & 890.00 & $ & 387.006 \\ \hline 5 & $ & 540.09 & $ & 264.99 \\ \hline 10 & $ & 283.346 & $ & 169.89 \\ \hline 12 & $ & 200.41 & $ & 137.71 \\ \hline 15 & $ & 92.95 & $ & 94,55 \\ \hline 18.1 & $ & 0.09 & s & 55.50 \\ \hline 24,29 & $ & -124.296 & $ & 0.02 \\ \hline \end{tabular} f. Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to two decimal places. Do not round your intermediate calculations. 14.92% 0. What is each project's MIRR at a WACC of 18% ? Round your answer to two decimal places. Do not round vour intermediate calculations. Project A: 18.056% Prolect B: 20.233%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Ethics In Finance Case Studies From A Womans Life On Wall Street

Authors: Kara Tan Bhala

1st Edition

3030737535, 978-3030737535

More Books

Students also viewed these Finance questions