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Problem #2: A firm with a 10% WACC is evaluating two projects for this year's capital budget. After-tax cash flows are as follows: 0 1

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Problem #2: A firm with a 10% WACC is evaluating two projects for this year's capital budget. After-tax cash flows are as follows: 0 1 2 3 4 5 Project A -$7,000 2,500 3,500 4,000 4,500 5,500 Project B -$19,000 7,600 6,600 8,000 7,200 8,000 Please answer the following questions: 1. Calculate Net Present Value (NPV) for both projects. (4 points) 2. Calculate IRR for both projects. (4 points) 3. Calculate MIRR for both projects (assuming a reinvestment rate of 10%), (8 points) 4. Calculate regular (not discounted) payback period for both projects. (4 points) 5. If the projects are mutually exclusive, which would you recommend and why? (6 points)

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