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please solve only part e,f,g,h .1 Boost 2:15 PM @ 7%O X Ch07 P20 Build a Model mod.xl... ... Gardial Fisheries is considering two mutually

image text in transcribedplease solve only part e,f,g,h

.1 Boost 2:15 PM @ 7%O X Ch07 P20 Build a Model mod.xl... ... Gardial Fisheries is considering two mutually exclusive investments. The projects' expected net cash flows are as follows: Time Expected Net Cash Flows Project A Project B ($375) ($575) ($300) $190 (S200) $190 ($100) $190 $600 $190 $600 $190 $926 $190 ($200) a. If each project's cost of capital is 12%, which project should be selected? If the cost of capital is 18%, what project is the proper choice? @ 12% cost of capital WACC = 12% @ 18% cost of capital Use Excel's NPV function as explained in this WACC - 18% chapter's Tool Kit Note that the range does not include the costs, which are added NPVA separately. NPVA NPV B- NPVB- c. What is each project's IRR? We find the internal rate of return with Excel's IRR function: Note in the graph above that the X-axis intercepts are equal to the two projects IRRs. IRRA IRR B = e. What is each project's MIRR at a cost of capital of 12%? At r= 18%? Hint: note that B is a 6-year project. @ 12% cost of capital 18% cost de capital MIRR A= MIRR BE MIRR A= MIRRRE 1. What is the regular payback period for these two projects? Project A 1 Time period 0 Cash flow Cumulative cash flow (375) (300) (200) (100) 600 $600 $926 ($200) Intermediate calculation for payback Payback using intermediate calculations 0 1 2 3 4 5 6 7 Project B Time period Cash flow Cumulative cash flow Intermediate calculation for payback Payback using intermediate calculations Payback using PERCENTRANK O K because cash flows follow normal pattern. g. At a cost of capital of 12%, what is the discounted payback period for these two projects? WACC - 0 1 2 3 4 5 6 Project A Time period Cash flow Disc. cash flow Disc. cum. cash flow Intermediate calculation for payback Payback using intermediate calculations 0 1 2 3 4 5 6 7 Project B Time period Cash flow Disc. cash flow Disc. cum. cash flow Intermediate calculation for payback Payback using intermediate calculations Discounted Payback using PERCENTRANK Ok because cash flows follow normal pattern. h. What is the profitability index for each project if the cost of capital is 12%? PV of future cash flows for A: Pl of A: PV of future cash flows for B: PI of B

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