Hyde Company is considering two capital investments. Both investments have an initial cost of $6,000,000 and total net cash inflows of $14,000,000 over 10 years. Hyde requires a 20% rate of return on this type of investment. Expected net cash inflows are as follows: (Click the icon to view the expected net cash inflows.) Read the requirements. Requirement 1. Use Excel to compute the NPV and IRR of the two plans. Which plan, if any, should the company pursue? (Use parentheses or a minus sign for a negative NPV. Round the NPV calculations to the nearest whole dollar and the IRR calculations to two decimal places, X.XX%.) The NPV (net present value) of Plan Alpha is $ The NPV (net present value) of Plan Beta is $ The IRR (internal rate of return) of Plan Alpha is $ %. The IRR (internal rate of return) of Plan Beta is $ %. Which plan, if any, should the company pursue? Based on the results above, the company should pursue because the NPV is and the IRR is the company's required rate of return. s relationship and the company's required rate of return, are your answers as expected in Requirement 1? Why or why not? Requirement 2. Explain the relationship between NPV ar Plan Alpha The internal rate of return is the interest rate that makes ti Plan Beta rate of return and if the net present value is negative, the moru. v. of an investment Thus, if an investment's net present value is positive, the internal rate of return is the required vuil is the required rate of return. Based on the results above, the company should pursue because the NPV is and the IRR is the company's required rate of return. Requirement 2. Explain the relationship between NPV and IRR. Based on this relationship s required rate of return, are your answers as expected in Requirement 1? Why or why not? negative Thus, if an investment's net present value is positive, the internal rate of return is the required The internal rate of return is the interest rate that makes the net present value of an investm rate of return and if the net present value is negative, the internal rate of return is positive IV ruyur vuate of return. Based on the results above, the company should pursue because the NPV is and the IRR is the company's required rate of return. Requirement 2. Explain the relationship between NPV and IRR. Based on this relationship and the company's require pur answers as expected in Requirement 1? Why or why not? greater than The internal rate of return is the interest rate that makes the net present value of an investment s, if an investment's net present value is positive, the internal rate of return is the required less than rate of return and if the net present value is negative, the internal rate of return is the required rate of re. The internal rate of return is the interest rate that makes the net present value of an investment Thus, if an investment's net present value is positive, the internal rate of return is the required rate of return and if the net present value is negative, the internal rate of return is equal to zero. Based on this relationship and the company's required rate of return, are your answers as expec greater than the original cost. Based on the relationship described above, the internal rate of return and net present value calc as expected. For Plan Alpha, the net present value is and the internal rate of return is less than the sum of the cash inflows. the required rate of return. For Plan Beta, the net present value is ang required rate of return. Based on this relationship and the company's required rate of return, are your answers as expected in Requirement 1? Why or why not? Based on the relationship described above, the internal rate of return and net present value calculated in Requirement 1 for the two plans as expected. For Plan Alpha, the net present value is and the internal rate of return is the required rate of return. For Plan Beta, the net present value is and the internal rate of return is te of return. are Requirement 3. After further negotiating, the company can now invest with an initial cost of $5,600,000 for both plans. Recalculate the NP ih plan, if any, should the company pursue? (Use Excel to determine your answers. Use are not Enter any number in the edit fields and then continue to the next question. Based on the relationship described above, the internal rate of return and net present value calculated in Requirement 1 for the two plans and the internal rate of return is as expected. For Plan Alpha, the net present value is the required rate of return. the required rate of return. For Plan Beta, the net present value is and the internal rate of return is negative Requirement 3. After further negotiating, the company can now invest with an initial cost of $5,600,000 for both plans. Recalculate the NPV and IRR. Which plan, if any, should the company pursue? (Us ine your answers. Use positive Enter any number in the edit fields and then continue to the next question. Based on the relationship described above, the internal rate of return and net present value calculated in Requirement 1 for the two plans and the internal rate of return is as expected. For Plan Alpha, the net present value is the required rate of return. the required rate of return. For Plan Beta, the net present value is and the internal rate of return is further negotiating, the company can now invest with an initial cost of $5,600,000 for both plans. Recalculate the NPV and IRR. Which plan, if any, should the company pursue? (Use Excel to determine your answers. Use is sign for a negative NPV. Round the NPV calculations to the nearest whole dollar and the IRR calculations to two decimal places, X.XX%.) greater than less than value) of Plan Alpha is $ The NPV (net present value) of Plan Beta is $ as expected. For Plan Alpha, the net present value is and the internal rate of return is Based on the relationship described above, the internal rate of return and net present value calculated in Requirement 1 for the two plans the required rate of return. For Plan Beta, the net present value is and the internal rate of return is the required rate of return. Requirement 3. After further negotiating, the company can now invest with an initial cost of $5,600,000 for both plans. Recali parentheses or a minus sign for a negative NPV. Round the NPV calculations to the nearest whole dollar and the IRR calcula R. Which plan, if any, should the company pursue? (Use Excel to determine your answers. Use laces, X.XX%.) greater than less than The NPV (net present value) of Plan Alpha is $ Requirement 3. After further negotiating, the company can now invest with an initial cost of $5,600,000 for both plans. Recalculate the NPV and IRR. Which plan, if any, should the company pursue? (Use Excel to determine your answers. Use parentheses or a minus sign for a negative NPV. Round the NPV calculations to the nearest whole dollar and the IRR calculations to two decimal places, X.XX%.) The NPV (net present value) of Plan Alpha is $ The NPV (net present value) of Plan Beta is The IRR (internal rate of return) of Plan Alpha is $ %. The IRR (internal rate of return) of Plan Beta is $ %. Which plan, if any, should the company pursue? O A. The company should not pursue either plan because the NPV is positive and the IRR is greater than the company's required rate of return for both plans. B. If the company has sufficient resources and the plans are not mutually exclusive, it should pursue both plans because the NPV is positive and the IRR is greater than the company's required rate of return for both plans. If the company must choose only one plan, it should pursue Plan Beta because it has the higher NPV and IRR. O C. If the company has sufficient resources and the plans are not mutually exclusive, it should pursue both plans because the NPV is positive and the IRR is greater than the company's required rate of return for both plans. If the company must choose only one plan, it should pursue Plan Alpha because it has the lower NPV and IRR. OD. The company should not pursue either plan because the NPV is negative and the IRR is less than the company's required rate of return for both plans. Data Table i Year Plan Alpha Plan Beta 1 1 $ 1,400,000 $ 1,400,000 2 1,400,000 1,800,000 3 1,400,000 2,200,000 4 1,400,000 5 1,400,000 1,800,000 1,400,000 700,000 6 1,400,000 1,400,000 7 600,000 8 1,400,000 500,000 9 1,400,000 1,400,000 400,000 3,200,000 10 $ 14,000,000 $ 14,000,000 Total Print Done