CAPITAL BUDGETING CRITERIA

A company has a 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:

01234567Project A-$300-$387-$193-$100$600$600$850-$180Project B-$405$135$135$135$135$135$135$0

1. What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
2. Project A $
3. Project B $
4. What is each project's IRR? Round your answer to two decimal places.
5. Project A%
6. Project B%
7. 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.
8. Project A%
9. Project B%
10. From your answers to parts a-c, which project would be selected?
11. -Select-
12. Project A
13. Project B
14. Item 7
17. If the WACC was 18%, which project would be selected?
18. -Select-
19. Project A
20. Project B
21. Item 8
24. 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.
25. Discount RateNPV Project ANPV Project B0%$$510121518.124.29
27. Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to two decimal places. Do not round your intermediate calculations.
28. %
29. What is each project's MIRR at a WACC of 18%? Round your answer to two decimal places. Do not round your intermediate calculations.
30. Project A%
31. Project B%