H 1 4 1 PROCLEM 1: 2. Given the following data for two Independent prolecta: Project A and Project B: 3. (a) Calculate the NPV of the two projects. $ 22,062.59 $ 16,373.37 4 (6) Calculate the IRR of the two projects 12.76% 13.51% 5 Accpet Reject 6 (c) Indicate your accept/Reject decisions for each project 7 (a) What would be your decision if the projects were mutually exclusive projects. Accpet project A 8 [Note: Use NPV for decision regarding mutually exclusive projects as IRR is not 9 applicable for such projects) 10 Year Project A Project B 11 0 -200,000 -200,000 12 13,500 92,500 13 2 36,700 65,900 14 3 75,400 50,300 15 84,000 32,700 16 5 99,600 25,000 WACC 17 9.50% 18 19 20 21 22 PROBLEM 2: 23 Glven the following data estimate the after tax cash flows for the Project for each year including year 'o'. Calculate the NPV for the project 24 25 Michigan Solar Panel Manufacturing Company 26 Cost of Equipment $6,000,000 27 Installation Charge $400,000 28 Life In Years 4 29 Straight Line Depreciation 30 Price / Unit $35 31 Annual Sales 150,000 32 Variable Cos/ Unit $15 33 Annual Fixed Costs $500,000 34 Salvage Value $600,000 35 WACC 10.50% 36 Tax Rate 20% 37 38 nov 40 41 42 44 45