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Cummings Products is considering two mutually exclusive investments whose expected net cash flows are as follows: EXPECTED NET CASH FLOWS Year Project A Project B
Cummings Products is considering two mutually exclusive investments whose expected net cash flows are as follows:
EXPECTED NET CASH FLOWS | ||
Year | Project A | Project B |
0 | -$300 | -$405 |
1 | -387 | 134 |
2 | -193 | 134 |
3 | -100 | 134 |
4 | 600 | 134 |
5 | 600 | 134 |
6 | 850 | 134 |
7 | -180 | 134 |
a) What is each project's MIRR at a cost of capital of 10%? (Hint: Note that B is a 7-year project.) Round your answers to two decimal places.
b) What is each project's MIRR at a cost of capital of 17%? (Hint: Note that B is a 7-year project.) Round your answer to two decimal places.
c) What is the crossover rate? Round your answer to two decimal places.
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