Question
Your division is considering two investment projects, each of which requires an up-front expenditure of $28 million. You estimate that the cost of capital is
Your division is considering two investment projects, each of which requires an up-front expenditure of $28 million. You estimate that the cost of capital is 11% and that the investments will produce the following after-tax cash flows (in millions of dollars):
| Year | Project A | Project B |
| 1 | 5 | 20 |
| 2 | 10 | 10 |
| 3 | 15 | 8 |
| 4 | 20 | 6 |
What is the crossover rate? Round your answer to two decimal places.
If the cost of capital is 11%, what is the modified IRR (MIRR) of each project? Round your answers to two decimal places.
Project A
Project B
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Enron And World Finance A Case Study In Ethics
Authors: P. Dembinski, C. Lager, A. Cornford, J. Bonvin
1st Edition
