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budgeting criteria A company has a 11% WACC and is considering two mutually exclusive investments that cannot be repeated) with the following cash flows: 0
budgeting criteria A company has a 11% WACC and is considering two mutually exclusive investments that cannot be repeated) with the following cash flows: 0 1 2 3 4 5 6 7 Project A Project 6 -$300 $405 -$387 $131 -$193 $131 -$100 $131 $600 $131 $600 $131 $850 $131 -$180 $0 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. HH 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. What is each project's IRA? Round your answer to two decimal places. Project A: Project B: 90 c. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Round your answer to two decimal places. Do not round your intermediate calculations. Project A: Project B: 9 d. From your answers to parts a c, which project would be selected? If the WACC was 18%, which project would be selected? c. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Round your answer to two decimal places. Do not round your intermediate calculations Project A: Project B: 96 d. From your answers to perts ac, which project would be selected? If the WACC was 18%, which project would be selected? e. Construct NPV profiles for Projects A and B. Round your answers to the nearest cent. Do not round your intermediate calculations. Negative value should be indicated by a minus sign. NPV Project A NPV Project Discount Rate 09 $ $ 5 $ $ 10 $ $ 12 $ S 15 $ S 18.1 $ $ 23.01 $ $ 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 9. What is each project's MIRR at a WACC of 18%7 Round your answer to two decimal places. Do not round your intermediate calculations Project A: 96 Project : 96
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