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show all work 4 11-17 CAPITAL BUDGETING CRITERIA A company has an 11% WACC and is considering two mutually exclusive investments that cannot be repeated)
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4 11-17 CAPITAL BUDGETING CRITERIA A company has an 11% WACC and is considering two mutually exclusive investments that cannot be repeated) with the following cash flows: 0 1 2 3 5 6 7 + + + Project A -$300 --$387 -$193 - $100 $600 $600 $850-$180 Project B - $405 $134 $134 $134 $134 $134 $134 $0 a. What is each project's NPV? b. What is each project's IRR? c. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) d. From your answers to parts a, b, and c, which project would be selected? If the WACC was 18%, which project would be selected? e. Construct NPV profiles for Projects A and B. f. Calculate the crossover rate where the two projects' NPVs are equal. g. What is each project's MIRR at a WACC of 18% Step by Step Solution
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