X AutoSave off Hameed Berk DeMarzo Harford Problem 8-28 Start Protected... Saved to this PC File Home Insert Page Layout Formulas Data Review View Automate Help PROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. A1 : X fx B C D Problem 8-28 G H Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. You are choosing between two projects, but can only take one. The cash flows for the projects are given in the table below: a. What are the IRRS of the two projects? b. If your discount rate is 5%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? 0 1 2 3 4 Project A Project B $ -50 $ $ -100 $ 25 S 20 $ 20 $ 20 S 15 40 S 50 $ 60 a. What are the IRRS of the two projects? IRR project A IRR project B b. If your discount rate is 5%, what are the NPVs of the two projects? Discount rate 5% < > 8-28 dy Upcoming Earnings a Q Search L Enable Editi NPV project A NPV project B c. The difference in the initial investment causes NPV and IRR to rank the projects differently. Is this statement True/False? Requirements In cell D15, by using cell references, calculate the IRR of project A (1 pt.). 2 In cell D16, by using cell references, calculate the IRR of project B (1 pt.). 3 In cell D22, by using the NPV function and cell references, calculate the NPV of project A (1 pt.). 4 In cell D23, by using the NPV function and cell references, calculate the NPV of project B (1 pt.). 5 In cell G27, type True or False depending on whether the difference in the ranking of the two projects (IRR vs. NPV) is due to the difference in the initial investment (1 pt.).