Payback, NPV, and MIRR

Your division is considering two investment projects, each of which requires an up-front expenditure of $22 million. You estimate that the cost of capital is 10% and that the investments will produce the following after-tax cash flows (in millions of dollars):

Year	Project A	Project B
1	5	20
2	10	10
3	15	8
4	20	6

A. What is the regular payback period for each of the projects? Round your answers to two decimal places. Project A ____ years Project B ____ years

B. What is the discounted payback period for each of the projects? Round your answers to two decimal places. Project A _____ years Project B _____ years

C If the two projects are independent and the cost of capital is 10%, which project or projects should the firm undertake?

-Select-Project A Project B Both projects

D If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake? -Select- Project A Project B

E If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake? -Select-Project A Project B

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

G. If the cost of capital is 10%, what is the modified IRR (MIRR) of each project? Round your answers to two decimal places. Project A _____ % Project B _____ %