Problem 10-21 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 12% 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

1. What is the regular payback period for each of the projects? Round your answers to two decimal places. Project A years Project B years
6. What is the discounted payback period for each of the projects? Round your answers to two decimal places. Project A years Project B years
11. If the two projects are independent and the cost of capital is 12%, which project or projects should the firm undertake? -Select-Project AProject BBoth projectsItem 5
16. If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake? -Select-Project AProject BItem 6
21. If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake? -Select-Project AProject BItem 7
26. What is the crossover rate? Round your answer to two decimal places. %
31. If the cost of capital is 12%, what is the modified IRR (MIRR) of each project? Round your answers to two decimal places. Project A % Project B %