The excel I provided was only for more information, the answer doesn't have to include the excel process, If you only provide results would be helpful enough, thank you so much!
Excel Online Structured Activity: Capital budgeting criteria A company has 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 -$300 -$100 $600 $600 Project A Project B -$387 $133 -$193 $133 $850 $133 - $180 $0 -$400 $133 $133 $133 The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. Project A: $ Project B: $ b. What is each project's IRR? Round your answer to two decimal places. Project A: % Project B: % c. 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 B: % d. From your answers to parts a-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. Round your answers to the nearest cent. Do not round your intermediate calculations. Negative value should be indicated by a minus sign. NPV Project A NPV Project B Discount Rate 0% $ $ 5 $ $ 10 $ $ 12 $ 15 $ $ 18.1 $ $ 24.18 $ f. Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to two decimal places. Do not round your intermediate calculations. % g. 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 B: % B C D E F G H 1 K L VVALU 12.00% 4 0 -$300 1 $387 3 $100 4 $600 5 $600 6 $850 7 $180 $193 -$400 $133 $133 $133 $133 $133 $133 $0 Formulas NPVA 5 6 Project A 7 8 Project B 9 10 11 Project NPV Calculations: 12 13 14 NPVB 15 16 Project IRR Calculations: 17 18 IRRE #N/A #N/A IRRA #N/A #N/A #N/A 20 21 Project MIRR Calculations: MIRRA 22 23 24 Alternatively, MIRRA can be calculated as: 25 Project A 26 27 PV of Year 1 Outflow 29 PV of Year 2 Outflow 30 PV of Year 3 Outflow PV of Year 7 Outflow 0 -$300 3 -$100 4 $600 5 $600 6 $850 -$387 $193 -$180 Formulas #N/A #N/A #N/A #N/A Formulas #N/A #N/A #N/A FV of Year 6 Inflow at Year 7 FV of Year 5 Inflow at Year 7 FV of Year 4 Inflow at Year 7 #N/A #N/A Sum of Inflow FVS Formulas 32 33 34 35 Sum of Outflow PVs 36 37 N 38 PV 39 PMT 40 FV 41 I/YR = MIRRA 42 43 MIRRB 44 46 Alternatively, MIRRg can be calculated as: 7 $0.00 0 $0.00 #N/A #N/A 0 $400 1 $133 2 $133 3 $133 4 $133 5 $133 6 $133 7 $0 Project B Formulas #N/A #N/A #N/A #N/A #N/A #N/A FV of Year 6 Inflow at Year 7 FV of Year 5 Inflow at Year 7 FV of Year 4 Inflow at Year 7 FV of Year 3 Inflow at Year 7 FV of Year 2 Inflow at Year 7 FV of Year 1 Inflow at Year 7 57 Sum of Outflow PVs #N/A #N/A Sum of Inflow FVs Formulas N 59 PV an PMT FV 62 I/YR = MIRRE 7 $0.00 0 $0.00 #N/A 12.00% #N/A Project Acceptance: WACC 67 Accept 68 WACC 70 71 NPVA 72 Accept NPVA 18.00% $2.66 $65.18 #N/A 74 NPV Profiles: Discount Rates NPVA NPVB $65.18 Discount Rates NPVA NPVB $2.66 $2.66 $65.18 #NA #N/A 76 77 78 79 80 81 82 83 0% 5.00% 10.00% 12.00% 15.00% 18.10% 24.18% 0% 5.00% 10.00% 12.00% 15.00% 18.10% 24.18% #N/A #N/A #N/A #NA #N/A #NA #N/A #N/A #N/A #N/A #N/A #N/A 85 86 NPV Profiles $1.20 an $1.00 $0.80 92 93 94 $0.60 $0.40 $0.00 0% 5.00% 10.00% 12.00% 15.00% 18.10% 24.18% $0.20 98 99 100 101 103 Calculation of Crossover Rate: 105 To Project A 106 0 -$300 1 $387 2 $193 3 $100 4 $600 5 $600 6 $850 7 $180 107 Project B -$400 $133 $133 $133 $133 $133 $133 $0 108 109 IV Project Delta ANA #N/A ANA ANA EN/A #N/A 111 112 Crossover Rate = IRRA 113 113 111 Project MIRR Calculations at WACC = 18% 115 WACC 147 117 MIRRA 118 MIRRE 119 18.00% #N/A #N/A
