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Excel Online Structured Activity: Capital budgeting criteria A company has a 12% WACC and is considering two mutually exclusive investments that cannot be repeated) with the following cash flows: 0 1 2 3 4 5 6 7 -$180 Project A Projects -$300 -$400 -$387 $135 -$193 $135 -$100 $135 $600 $135 $600 $135 $850 $135 $0 The data has been collected in the Microsoft Excel Online fille below. Open the spreadsheet and perform the required analysis to answer the questions below. H Open spreadsheet a. What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. Project Ais 200.41 Project B: $ 155.04 b. What is each project's IRR? Round your answer to two decimal places. Project A 18.10 Project : 24.83 % c. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project Bs ) Round your answer to two decimal places. Do not round your intermediate calculations Project A: Project : % d. From your answers to parts, which project would be selected? ProADO If the WACC was 18%, which project would be selected? Project e. Construct NPV profiles for Projects A and B. Round your answers to the nearest cent. Do not round your intermediate calculations. Negative value should be indicated by a minus si Discount Rate 0% NPV Project $ NPV Project $ $ S $ 10 5 $ 12 5 15 18.1 a. What is each project's NPV? Round your answer to the nearest ont. Do not round your intermediate calculations. Project A:s 200.41 Project B: $ 155.04 b. What is each project's IRR? Round your answer to two decimal places. Project A: 18.10 Project B 24.83 What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Round your answer to two decimal places. Do not round your intermediate calculations. Project A % Project : 96 d. From your answers to parts a-c, which project would be selected? Projeto If the WACC was 18%, which project would be selected? e. Construct NPV profiles for Projects A and B. Round your answers to the nearest cent. Do not round your Intermediate calculations. Negative value should be indicated by a minus sign. Discount Rate 0W 5 NPV Protect $ NPV Protect $ $ $ 10 $ $ s $ 12 15 $ $ $ $ 18.1 24.83 $ 5 1. Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to two dedmal places. Do not round your intermediate calouations. 9. What is each project's MIRR at a WACC of 18%? Round your answer to two decimal places. Do not round your intermediate calculations Project A Project : % Check My Work Reset Problem how ESET TUR re 6 % F G D F G H 1 3 K Capgrierte 3 WACO 5 ott 3507 -100 SCO 3430 $135 $ SOS SIS SCHS 3136 30 Pred NFV Cabelo: 16 19 Calele 9 1 per www Caledon 22 MA MAMA canteeds 123 00 SECO ent OSUS out ENER MA 27 20 Pouto 21 PV of PV of Your Outlow 31 Per Toto 12 33 34 25 36 Sum of Formu we we PV of Year Verower Peraw NA Sumo wow L NE 40 MT 41 PM 4 WEMA 44 45 Allemagne DOVE SES VEIS YERS * 05 IS For INA NA NA NA NA ofen Verow vo PVY PV of How to 15 WO A D E G H 1 Forms 50.00 0 SO DO NA 12.00% WNIA 50 N 61 PV 62 PMT 63 PV 64 VYR-MRR 65 66 Project Acceptance: 67 WACC 68 Acopt 69 70 WACC 71 NPVA 72 NPVA 73 Accept 74 75 NPV Profile 76 Discount Rates 72 70 79 80 8: B2 18. DON $2.ee ANIA NPVA NPVA Discount Ro NPVA $72.18 NPVA $26 52.00 $12.10 ON 5.00% 10.00% 12.00N RUA NA WNA ON 5.00 1000 120 15.00 SR 24 RON ANA ANA ANA NA NA NA NA APUA 18.101 240 87 NPV Profiles IN IN 0 $300 $180 -$100 3000 $600 5860 5110 $400 $135 $135 $135 $18 $0 $135 5135 99 100 101 SON 102 103 104 Calculation of Crossover Rate 105 106 Project A 107 108 PB 109 110 Project Delta 111 112 113 Crossover Ral 70 115 Project MR Calatons al WACC - 10% 116 WACC 118 MIRRA 119 MIRRE NA NA NA ANIA NIA 18.00 DNA
