Capital budgeting criteria

WACC

Project NPV Calculations:

INPV

NPV

Project IRR Calculations:

$IR{R}_A$

$I_{R{R}_B}$

Project MIRR Calculations: MIRR ${?}_A$

Alternatively, MIRR ${?}_A$ can be calculated as:

Project $A$

PV of Year $1$ Outflow

PV of Year $2$ Outflow

PV of Year $3$ Outflow

PV of Year $7$ Outflow

$2$

$32$

$33$

$34$

$35$

$35$

$36$

$37$

$37$

$38N$

$9$ PV

$40$ PMT

$41$ FV

$42,$ INR $=$ MIRR ${?}_A$

$43$

$44$ MIRR

$-=B$ Sheet $1$

Workbook Statistics

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A company has a $12\%$ 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.

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.

Project A: $\%$

Project B: $\%$

c$.$ What is each project's MIRR? $($Hint: Consider Period $7$ as the end of Project B$\text{'}$s life.$)$ Round your answer to two decimal places. Do not round your intermediate calculations.

Project A: $\%$

Project B: $$

d$.$ From your answers to parts a$-$c$,$ 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 sigr

Discount Rate

$0\%$

$5$

NPV Project A

$ $$

$ $$

NPV Project B

$ $$

$

Question $1$

$0/25$

Submit

Project A: $\%$

Project B: $$

c$.$ What is each project's MIRR? $($Hint: Consider Period $7$ as the end of Project B$\text{'}$s life.$)$ Round your answer to two decimal places. Do not round your intermediate calculations.

Project A: $\%$

Project B: $\%$

d$.$ From your answers to parts a$-$c$,$ 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.

$\backslash$table$[[$Discount Rate,NPV Project A$,$NPV Project B$],[0\%,$$$,$$