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MBA Assignment 2: Applied Corporate Finance SUMMER 2020 Investment Decision Rules Problem 1 Coral, Inc. is evaluating investment opportunities and should decide between two mutually
MBA Assignment 2: Applied Corporate Finance SUMMER 2020 Investment Decision Rules Problem 1 Coral, Inc. is evaluating investment opportunities and should decide between two mutually exclusive projects: B or C. Both projects require the same initial investments 18 million and generate different cash flows as follow Project (B) generates 2.2 million in perpetuity growing at 3.0% (forever) Project (C) generate 1.6 million in perpetuity growing at 4.0% (forever) a) If Coral is using the IRR to make her final decision, calculate the IRR of each of the following project b) Calculate the NPV of both project if the required rate is 10% c) Calculate the crossover rate (If existing) d) Graph the NPV function of both project and discuss (You can use excel and then insert your Graph here)
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