Question
Considering the following projects. Project Year 0 1 2 3 4 A Cash flows -$100 $35 $35 $35 $35 B Cash flows -$100 $60 $50
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Considering the following projects.
| Project | Year | 0 | 1 | 2 | 3 | 4 |
| A | Cash flows | -$100 | $35 | $35 | $35 | $35 |
| B | Cash flows | -$100 | $60 | $50 | $40 | $30 |
Project A has WACC = 6.00% while project B has WACC = 8.50%.
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If these two projects are mutually exclusive, which project should the company accept based on the NPV, IRR, MIRR, payback, and discounted payback period for each project?
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Would your decision (Your answer from part A) change if these two projects were independent?
***** PLEASE ANSWER WITH DETAILS FOR BEGINNERS TO UNDERSTAND (FORMULAS, GUESS RATES ETC.) NO SCREEN SHOT ANSWERS NOR EXCEL. THANKS *****
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Financial Institutions Management A Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett
7th Edition
0073530751, 9780073530758
