eBook NPV and IRR Analysis Cummings Products Company is considering two mutually exclusive investments whose expected net cash flows are as follows: EXPECTED NET CASH FLOWS Year Project Project B -$650 -$400 -528 -219 210 210 - 150 1,100 210 820 210 990 210 -325 210 a. Construct NPV profiles for Projects A and B. Select the correct graph. VPVS) T 1400 PMS 1400 VPVC 1400 1200 1000 800 12001 1000 800 1 2007 10007 2007 Pa to search NU U U U U LT Project is the proper choice. d. What is each project's MIRR at a cost of capital of 10%? (Hint: Consider Period 7 as the end of Project B's life.) Do not round intermediate calculations. Round your answers to two decimal places. Project A: 23.09% Project B: 17.35 % What is each project's MIRR at a cost of capital of 17%? (Hint: Consider Period 7 as the end of Project B's life.) Do not round Intermediate calculations. Round your answers to two decimal places. Project A: 21.92 % Project B: 21.03 % e. What is the crossover rate? Do not round Intermediate calculations. Round your answer to two decimal places What is its significance? 1. The crossover rate has no significance in capital budgeting analysis. II. If the cost of capital is greater than the crossover rate, both the NPV and IRR methods will lead to the same project selection III. If the cost of capital is less than the crossover rate, both the NPV and IRR methods lead to the same project selections. CheckM Work.Nemateriaal ote @ to search w