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Thanks for the help! ur division is considering two investment projects, each of which requires an up-front expenditure of $26 million. You estimate that the
Thanks for the help!
ur division is considering two investment projects, each of which requires an up-front expenditure of $26 million. You estimate that the cost of capital is 8% and that the investments will oduce the following after-tax cash flows (in millions of dollars): a. What is the regular payback period for each of the projects? Round your answers to two decimal places. ProjectA:ProjectB:yearsyears b. What is the discounted payback period for each of the projects? Do not round intermediate calculations. Round your answers to two decimal places. Project A: years Project B: years c. Calculate the NPV of the two projects. Do not round intermediate calculations. Round your answers to the nearest cent. Project A: \$ Project B:$ Calculate the IRR of the two projects. Do not round intermediate calculations. Round your answers to two decimal places. Project A: % Project B: If the two projects are independent and the cost of capital is 8%, which project or projects should the firm undertake? The firm should undertake d. If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake? The firm should undertake e. If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake? The firm should undertake f. What is the crossover rate? Round your answer to two decimal places. % g. If the cost of capital is 8%, what is the modified IRR (MIRR) of each project? Do not round intermediate calculations. Round your answers to two decimal places. Project A: % Project BStep by Step Solution
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