Expected Net Cash Flows

Year

Project A

Project B

$0$

$-$$$365$

$-$$$565$

$1$

$-330$

$180$

$2$

$-220$

$180$

$3$

$-110$

$180$

$4$

$660$

$180$

$5$

$660$

$180$

$6$

$958$

$180$

$7$

$-220$

$180$

A$.)$ If each project's cost of capital is $11\%,$ which project should be selected? Round your answers to the nearest cent.

NPV $($Project A$)$: $ $\_\_\_\_\_\_\_$

NPV $($Project B$)$: $ $\_\_\_\_\_\_\_\_\_\_\_$

B$.)$ If the cost of capital is $17\%,$ what project is the proper choice? Round your answers to the nearest cent.

NPV $($Project A$)$: $ $\_\_\_\_\_\_\_\_\_\_\_$

NPV $($Project B$)$: $ $\_\_\_\_\_\_\_\_\_\_\_\_$

What is each project's IRR? IRR function, set the guess parameter to be $10\%.)$ Round your answers to two decimal places.

IRR $($Project A$)$: $\_\_\_\_\_\_\_\_\_\_$

IRR $($Project B$)$: $\_\_\_\_\_\_\_\_\_$

What is the crossover rate, and what is its significance? $($ IRR function, set the guess parameter to be $10\%.)$ Round your answer for the crossover rate to two decimal places and for the NPV to the nearest cent.

The crossover rate is fill$\_\_\_\_\_\_\_\_\_.$The crossover rate represents the cost of capital at which the two projects have the NPV of $ $\_\_\_\_\_\_\_\_\_\_$

What is each project's MIRR at a cost of capital of $11\%?$ At r $=17\%?$ Round your answers to two decimal places.

Project A

Project B

MIRR at r $=11\%$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

$..\_\_\_\_\_\_\_\_\_$

MIRR at r $=17\%$

$\_\_\_\_\_\_\_\_\_\_$

$..\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

What is the regular payback period for these two projects? Round your answers to two decimal places.

Regular payback period $($Project A$)$: $\_\_\_\_\_\_\_\_\_\_\_$

Regular payback period $($Project B$)$:$\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ yearshe discounted payback period for these two projects? Round your answers to two decimal places.

Discounted payback period $($Project A$)$:$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Discounted payback period $($Project B$)\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

What is the profitability index for each project if the cost of capital is $11\%?$ Round your answers to three decimal places.

Profitability index $($Project A$)$: $\_\_\_\_\_\_\_\_\_\_\_$

Profitability index $($Project B$)$: $\_\_\_\_\_\_\_\_\_\_\_\_\_$