JUST NEED HELP WITH B UNDER BOTH FRANCHISE A AND B. I UNDERSTAND AND HAVE FIGURED OUT THE REST.

Your boss, the chief financial officer (CFO) for Southern Textiles, has just handed you the estimated cash flows for two proposed projects. Project L involves adding a new item to the firms fabric line. It would take some time to build up the market for this product, so the cash inflows would increase over time. Project S involves an add-on to an existing line, and its cash flows would decrease over time. Both projects have 3-year lives because Southern is planning to introduce an entirely new fabric at that time. Here are the net cash flow estimates (in thousands of dollars): Expected Net Cash Flows Year Project L Project S 0 $(100) $(100) 1 10 70 2 60 50 3 80 20 The CFO also made subjective risk assessments of each project, and he concluded that the projects both have risk characteristics that are similar to the firms average project. Southerns required rate of return is 10%. You must now determine whether one or both of the projects should be accepted.

Projected Total Cash Flow - Franchise A Year a. Payback Period 4 Total project cash flow Cumulative cash flow Calculate number of years to payback b. Discounted Payback Period Discounted cash flow(Row 9 amount discounted to PV) Cumulative cash flow Calculate number of years to payback C. Net Present Value Total project cash flow Formula for NPV NPV(Rate,D19:F17)+C19 d. Internal Rate of Return Total project cash flow Formula for IRR IRR(C23:F23) e. Modified Internal Rate of Return Total project cash flow Formula for MIRR-MIRR(C23:F23,rate,rate) Projected Total Cash Flow - Franchise B a. Payback Period Year 0 Total project cash flow Cumulative cash flow Calculate number of year s to payba ck b. Discounted Payback Period Discounted cash flow(Row 33 amount discounted to PV) Cumulative cash flow Calculate number of years to pay back c. Net Present Value Total project cash flow Formula for NPV NPV(Rate,D43:F43)+C43 d. Internal Rate of Return Total project cash flow Formula for IRR IRR(C47:F47 e. Modified Internal Rate of Return Total project cash flow Formula for MIRR =MIRR(C51:F51,rate,rate) Projected Total Cash Flow - Franchise A Year a. Payback Period 4 Total project cash flow Cumulative cash flow Calculate number of years to payback b. Discounted Payback Period Discounted cash flow(Row 9 amount discounted to PV) Cumulative cash flow Calculate number of years to payback C. Net Present Value Total project cash flow Formula for NPV NPV(Rate,D19:F17)+C19 d. Internal Rate of Return Total project cash flow Formula for IRR IRR(C23:F23) e. Modified Internal Rate of Return Total project cash flow Formula for MIRR-MIRR(C23:F23,rate,rate) Projected Total Cash Flow - Franchise B a. Payback Period Year 0 Total project cash flow Cumulative cash flow Calculate number of year s to payba ck b. Discounted Payback Period Discounted cash flow(Row 33 amount discounted to PV) Cumulative cash flow Calculate number of years to pay back c. Net Present Value Total project cash flow Formula for NPV NPV(Rate,D43:F43)+C43 d. Internal Rate of Return Total project cash flow Formula for IRR IRR(C47:F47 e. Modified Internal Rate of Return Total project cash flow Formula for MIRR =MIRR(C51:F51,rate,rate)