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Calculations and answers please! Capital Budgeting Problem (15 points) Show calculations and calculator entries to get credit. Maven Design Inc, is considering two investment projects,

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Capital Budgeting Problem (15 points) Show calculations and calculator entries to get credit. Maven Design Inc, is considering two investment projects, X and Y. Company's cost of capital is 7.50% and that the investments will produce the following after-tax cash flows (in thousands of dollars): a. Calculate the NPV, IRR, MIRR, regular payback period, discounted payback period, and profitability index for each project. For each selection criterion, indicate the correct accept/reject decision for each project and ranking (best acceptable project). Assume a 3-year payback acceptance criterion for the company. [ 5 points] b. If the two projects are independent and the cost of capital is 7.5%, which project or projects should the firm undertake based on the NPV and IRR criteria? [ 2 points] c. If the two projects are mutually exclusive and the cost of capital is 7.5%, do you see any conflict between the decisions made by NPV and IRR criteria? If yes, what is the reason for the conflict here? [Hint: think about time and size of cash flows.] [2 points] d. If the two projects are mutually exclusive and the cost of capital is 11%, which project should the firm undertake? [Hint: Consider the best criterion in case of conflict, if any.] [2 points] e. What is the crossover rate? [Hint: Find IRR of CF differences between two projects.] [2 points] f. The CEO believes the IRR is the best selection criterion, while the CFO advocates the NPV. If the decision is made by choosing the project with the higher IRR rather than the one with the higher NPV, how much, if any, value will be forgone, i.e., what's the chosen NPV versus the maximum possible NPV for the CoC of 7.5% ? Note that (1) "true value" is measured by NPV, and (2) under some conditions the choice of IRR vs. NPV will have no effect on the value gained or lost. [2 points]

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