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WHich Graph represents the NPV? Graph A,B,C, or D 4 Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and
WHich Graph represents the NPV?
Graph A,B,C, or D
4 Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating workin capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 12%. 0 1 2 3 1 1 1 1 Project A -1,040 590 360 230 280 Project B -1,040 290 280 360 750 What is Project Delta's IRR? Do not round intermediate calculations. Round your answer to two decimal places. 19 % NPV Profiles D What is the significance of this IRR? It is the crossover rate after this point when mutually exclusive projects are considered there is no conflict in project acceptance between the NPV and IRR approaches. Review the graphs below. Select the graph that correctly represents the correct NPV profile for Projects A and B by using the following drop-down menu. A B -Select- NPV Profiles A NPV Profiles D NPV Profiles c INPV TNPV IN PV IN PV 600+ 600 600+ 6007 500+ 5001 500+ 500+ 400 400 4004 4001 300 300 3001 300+ 200 200 200 200 100 100 100 100 10 15 25 30 10 19 30 10 15 20 25 30 5 10 15 -100 25 30 Coat of apgal Cost of Capital Cost of capital real -100 200 300 -400 -100 200 300 Cost of Capital 200 300 400 -1001 200 300 -1001 -4001 Project A - Project B Project A Project B Project A Project B Project A Project BStep by Step Solution
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