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yes excel Problem Three (20 marks) If the cost of capital is 12%, which project should be chosen? If the cost of capital is 27%
yes excel
Problem Three (20 marks) If the cost of capital is 12%, which project should be chosen? If the cost of capital is 27% which project should be chosen? Construct the NPV profiles for Project A and Project B. (Note: plot the NPVs of both projects on the same graph.) The cost of capital ranges from 0% to 30% by increments of 2%. Expected Cash Flows Project A 0 1 -72.000 11 -51.000 2 4.500 3 30.500 60,500 5 75,000 61 88.000 71 20.000 Expected Cash Flows Proiect B -23.500 8.500 10.000 12,500 16.000 18,000 19.500 20.000 a) Calculate each project's IRR and the crossover rate of the two projects. b) Calculate each project's MIRR at a cost of capital of 12% c) Calculate each project's regular payback period. d) Calculate each project's discounted payback period with a cost of capital of 12% e) Calculate each project's profitability index at a cost of capital of 12% Step by Step Solution
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