Vio 0 4 6 7 Excel Online Structured Activity: Capital budgeting criteria A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 1 2 5 + Project A -$300 - $387 -$193 $600 $600 $850 -$180 Project B -$405 $131 $131 $131 $131 $131 $131 $0 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. -$100 HH 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. What is each project's IRR? Round your answer to two decimal places Project A: Project % What is ach nierte MID02 (Hint: rnneider Derint 7 the end of Dirt Rien nur answer to wr darimanan na nam 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 : d. From your answers to parts ac, 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. 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 NPV Project A NPV Project B 0% $ $ 5 $ $ 10 $ $ 12 $ $ 15 $ $ 18.1 $ $ 23.01 $ Calculate the crossover rate where the two projects NPVs are equal. Round your answer to two decimal places. Do not round your intermediate calculations a. 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: Check My Work Reset Problem 12 C D E F H Capit budgetingormeria 13.00 3 WACC 4 5 6 Project 0 7 2 $190 5387 4 5600 5 5600 6 SO $100 $190 $405 Project $131 $131 $131 5131 5131 $131 30 10 11 Project NPV Cabo 12 NPVA Formus NA WA 14 NPV. 16 ProR Calaton 17 NA NA 19 21 Pro MRR Calculation 22 MIRRA ANA Alternatively, MRR, can be called at 26 Prot 3300 $367 3100 7 $180 9800 5600 3850 PV of Year Oumow 29 PV of Year 2 Outflow Formulas NA NA Cuency 2 + F G PV of Year Outw PVYOW Peso Pof Year Otto Formes NA NA Fom HA Bu Sum of Outflow PV NA Form N PV PUT 5000 50.00 WRRR ANA MIRR NA Ally MIRR, can be cautated as o $131 $150 3131 4 5151 3131 557 7 so For NA EN ENCA NA G H K L 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 Sum of Inflow FVs 4 $131 5 $131 6 $131 7 $0 Formulas #N/A #N/A #N/A #N/A WNIA WNIA 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 C 0 E H 58 Sum of Oulu PVA ANA Fomus 50.00 0 $0.00 SON 6 PV 62 PM 63 FV 54 YA MIRR 65 06 Project Aange 67 WACC 68 Accept 69 70 WACC 71 NPV. 72 NPV. 73 Accept 13.00% NA 18.00% $2.66 15319 NA NPVA Discount Ratu NPVA NPV, 75 NPV Pro 26 Discount Rates 77 7 39 5266 NPV) 36519 200 36379 0% SOO 0% 5.00% 10.00% 12.00% 15.00% 18.109 23.01% 10.00 12.00 NA UNA NA NA ANA ANA ANA NA UNA ANIA ANA ANA WA NA 15.00 18.10% 23015 Sheet1 Anme C D G H 35 NPV Profiles SE 330 51.00 TE 2 09.08 PE 10.60 6 18.8 30.30 IC 10 ON D MIT 15.00 ILION NULL S 32 23 5 Caloto of Crossover Rate 05 Project A 0 5 2 3 -5700 4 5800 5 5600 ST $100 3850 -3405 $131 $131 Project 5131 5131 5131 $131 10 VING VING TINA VINS WINS NA VINE NA 9 Project Delta 1 2 3 Crossover Rate VINE A C D 3987 -$100 Sood 500 -$405 5131 $131 $131 5131 5131 5131 50 SNIA INA SNA SNIA INA NA INA SUA WA 06 ProA 09 0 Project 00 10 Project Delta 11 12 13 Crossover Rabe RR 14 115 PM Calculation af WACC - 10 116 wwco 17 1 MIRRA 119 MAR 120 121 18.00% WNIA ANIA
