If the cost of capital is 12%, which project should be chosen? If the cost of capital is 27% which project should be chosen?

Construct the NPV profiles for Project A and Project B. (Note: plot the NPVs of both projects on the same graph.) The cost of capital ranges from 0% to 30% by increments of 2%.

	Expected Cash Flows	Expected Cash Flows
Year	Project A	Project B
0	-61,000	-28,500
1	-51,000	8,500
2	4,500	10,000
3	31,500	12,550
4	60,500	16,000
5	72,500	17,500
6	87,000	19,500
7	92,000	22,000

1. a) Calculate each projects IRR and the crossover rate of the two projects.

2. b) Calculate each projects MIRR at a cost of capital of 12%.

3. c) Calculate each projects regular payback period.

4. d) Calculate each projects discounted payback period with a cost of capital of 12%.

5. e) Calculate each projects profitability index at a cost of capital of 12%.

Please use Excel to Answer and show work

Problem Three (20 marks) If the cost of capital is 12%, which project should be chosen? If the cost of capital is 27% which project should be chosen? Construct the NPV profiles for Project A and Project B. (Note: plot the NPVs of both projects on the same graph.) The cost of capital ranges from 0% to 30% by increments of 2%. Year 0 1 2 3 4 5 6 7 Expected Cash Flows Project A -61,000 -51,000 4,500 31,500 60,500 72,500 87,000 92,000 Expected Cash Flows Project B -28,500 8,500 10,000 12,550 16,000 17,500 19,500 22,000 a) Calculate each project's IRR and the crossover rate of the two projects. b) Calculate each project's MIRR at a cost of capital of 12%. c) Calculate each project's regular payback period. d) Calculate each project's discounted payback period with a cost of capital of 12%. e) Calculate each project's profitability index at a cost of capital of 12%. Problem Three (20 marks) If the cost of capital is 12%, which project should be chosen? If the cost of capital is 27% which project should be chosen? Construct the NPV profiles for Project A and Project B. (Note: plot the NPVs of both projects on the same graph.) The cost of capital ranges from 0% to 30% by increments of 2%. Year 0 1 2 3 4 5 6 7 Expected Cash Flows Project A -61,000 -51,000 4,500 31,500 60,500 72,500 87,000 92,000 Expected Cash Flows Project B -28,500 8,500 10,000 12,550 16,000 17,500 19,500 22,000 a) Calculate each project's IRR and the crossover rate of the two projects. b) Calculate each project's MIRR at a cost of capital of 12%. c) Calculate each project's regular payback period. d) Calculate each project's discounted payback period with a cost of capital of 12%. e) Calculate each project's profitability index at a cost of capital of 12%