Question 3

Braun Industries is considering an investment project that has the following cash flows:

Project

Year Cash Flows

0 -$634

1 $374

2 $309

3 $327

The companys WACC is 13.3 percent. What is the projects payback, internal rate of return (IRR), and net present value (NPV)? Should this project be accepted?

Group of answer choices

1.54 years; 31.31%; $191.64; No

1.74 years; 29.31%; $171.64; Yes

1.54 years; 31.31%; $191.64; Yes

1.64 years; 30.31%; $181.64; Yes

1.84 years; 28.31%; $161.64; Yes

Question 4

Mooradian Corporation estimates that its weighted average cost of capital is 18.4 percent. The company is considering two mutually exclusive projects whose after-tax cash flows are as follows:

Year Project S CF Project L CF

0 ($4,803) ($4,165)

1 $4,389 $2,922

2 $3,471 $3,909

3 $2,859 $2,265

4 $3,456 $263

What is the modified internal rate of return (MIRR) of the project with the highest NPV?

Should this project be accepted?

Group of answer choices

41.01%; Yes

41.01%; No

40.01%; Yes

40.01%; No

39.01%; Yes