Payback, NPV, and MIRR

Your division is considering two investment projects, each of which requires an up-front expenditure of $25 million. You estimate that the cost of capital is 11% and that the investments will produce the following after-tax cash flows (in millions of dollars):

What is the regular payback period for each of the projects? Round your answers to two decimal places.

Project A: years

Project B: years

What is the discounted payback period for each of the projects? Do not round intermediate calculations. Round your answers to two decimal places.

Project A: years

Project B: years

Calculate the NPV of the two projects. Do not round intermediate calculations. Round your answers to the nearest cent.

Project A: $

Project B: $

Calculate the IRR of the two projects. Do not round intermediate calculations. Round your answers to two decimal places.

Project A: %

Project B: %

If the two projects are independent and the cost of capital is 11%, which project or projects should the firm undertake? The firm should undertake -Select- .

If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake? The firm should undertake -Select- .

If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake? The firm should undertake -Select- .

What is the crossover rate? Round your answer to two decimal places. %

If the cost of capital is 11%, what is the modified IRR (MIRR) of each project? Do not round intermediate calculations. Round your answers to two decimal places.

Project A: %

Project B: %

\begin{tabular}{ccc} Year & Project A & Project B \\ \hline 1 & 5 & 20 \\ 2 & 10 & 10 \\ 3 & 15 & 8 \\ 4 & 20 & 6 \end{tabular}