Problem 2: Given the net cash flows for Project X (over 3-years) for Aberdeen Company Year CF 0-$300,000 1 $120,000 2 $128,000 3 $155,000 The company's capital structure is distributed equally between debt, preferred stock, common stock and new common stock. It has also the following information: 1- After tax cost of debt: 5.4%. Tax rate: 40% 2- Preferred stocks are selling at $80 per share and pay a dividend of $8 per share 3- Common stocks are selling at $50 per share, pay a year-end dividend of $3 per share and grow at a constant rate of 6%. When issuing new common stock, a 10% flotation cost would be incurred. The company is also considering another two projects 'Y& Z' with the following information Projects Y Z NPV $20,100.3 $37,3202 MIRR 9.2% 14.5% IRR 7.77% 15.04% Payback period in years 4.1 1.64 Noted. This problem is related to questions 1 to 9 5. Assuming that the three projects X,Y & Z are independent, which project (s) should the company accept? A. Project X B. Project Y C. Only Projects X & Z D. All E. Reject all projects 6. Assuming that the three projects X,Y & Z are mutual exclusive, and which project (s) should the company accept? A Project X B. Project Y C. Project Z D. All E. Reject all projects 7. Assuming that the three projects X, Y & Z are independent, based on MIRR criteria which project(s) should the company accept? A. Project X B. Project Z C. Projects X Y&Z D. Only Projects X & Z E Reject all projects