- O X Do Homework - Sagi Levi - Google Chrome mathxl.com/Student/PlayerHomework.aspx?homeworkld=5353347518 questionld=8&flushed=true&cid=55834128.centerwin=yes FIN 2200 2019 09 Sagi Levi : | 10/23/19 8:59 PM Homework: Assignment 5: Chapters 8 and 9 Save Score: 0 of 1 pt 8 of 20 (18 complete) HW Score: 65%, 13 of 20 pts Problem 8-24 Question Help O You have just started your summer internship, and your boss asks you to review a recent analysis that was done to compare three alternative proposals to enhance the firm's manufacturing facility. You find that the prior analysis ranked the proposals according to their nded the highest IRR option, Proposal A. You are concerned and decide to redo the analysis using NPV to determine whether this recommendation was appropriate. But while you are confident the IRRs were computed correctly, it seems that some of the underlying data regarding the cash flows that were estimated for each proposal was not included in the report. For Proposal B, you cannot find information regarding the total initial investment that was required in Year 0. And for Proposal C, you cannot find the data regarding additional salvage value that will be recovered in Year 3. Here is the information you have in $millions): Proposal Year 0 Year 1 Year 2 Year 3 - $100 IRR 60.0% 60.0% 48.0% $30 $88 $0 $37 $153 $206 $95 $204+? - $100 $0 a. Determine the two missing data amounts. b. Suppose the appropriate cost of capital for each alternative is 10%. Using this information, determine the NPV of each proposal. Which project should the firm choose? c. Why is ranking the projects by their IRR not valid in this situation? a. Determine the two missing data amounts ($millions). Year 0 Year 1 Year 2 Year 3 - $100 $30 Proposal IRR 60.0% 60.0% 48.0% (Do not round until the final answer. Then, round to two decimal places.) $153 $206 - $100 $37 $0 Enter your answer in the edit fields and then click Check Answer. 5 parts remaining Clear All Final Check