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Please show all work on excel You just got hired by McKinsey & Company as a financial consultant and theyre paying you an egregious amount

Please show all work on excel

You just got hired by McKinsey & Company as a financial consultant and theyre paying you an egregious amount of money. Accordingly, they have you working on the tough projects like this one

Consider the following two mutually exclusive projects available to the firm. Free cash flows for Projects A and B are provided below. Assume the two projects have essentially the same level of riskiness, and your prior analysis indicates that the appropriate risk-adjusted hurdle rate (i.e., the WACC) is 7.45% for both projects. Perform the analysis below and make a recommendation as to which project to pursue.

Year 0 1 2 3 4 5 6
Project A -$3,200 $700 $700 $700 $700 $700 $700
Project B -$600 $58 $58 $695

D. Despite your cautioning on the pitfalls of the measures, your boss insists that you compute the IRR and payback period for the projects and use these to determine which project the firm should pursue. You oblige his request because they pay you the aforementioned, egregious salary to do so.

Compute the IRR for each project and indicate which should be selected based on this measure.

E. Compute the payback period for each project. Based on payback, which project should be selected?

F. Understanding that your bosss preference for IRR and payback period likely lies in the simplicity and intuitiveness of these measures, you feel compelled to offer similar yet improved metrics to provide the same appealing simplicity coupled with added analytical integrity. Accordingly, you compute the MIRR and discounted payback period to complement your bosss request.

What is the MIRR for each project, and which project should be selected according to MIRR?

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