Question

A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:

0

1

2

3

4

5

6

7

Project A	-$300	-$387	-$193	-$100	$600	$600	$850	-$180
Project B	-$400	$133	$133	$133	$133	$133	$133	$0

1. What is each project's NPV? Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent.

   Project A: $  

   Project B: $  

2. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places.

   Project A:   %

   Project B:   %

3. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Do not round intermediate calculations. Round your answers to two decimal places.

   Project A:   %

   Project B:   %

4. Construct NPV profiles for Projects A and B. If an amount is zero, enter 0. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent.

   Discount Rate	NPV Project A	NPV Project B
   0%	$	$
   5
   10
   12
   15
   18.1
   24.18

5. Calculate the crossover rate where the two projects' NPVs are equal. Do not round intermediate calculations. Round your answer to two decimal places.

     %

6. What is each project's MIRR at a WACC of 18%? Do not round intermediate calculations. Round your answers to two decimal places.

   Project A:   %

   Project B:   %

Answer 1

As per rules I am answering the first 4 subparts of the question

Sub Part
a	NPV
	Project A	$162.48
	Project B	$131.67
b	IRR
	Project A	18.10%
	Project B	24.18%
c	MIRR
	Project A	15.60%
	Project B	17.69%

d:

Discount Rate	NPV Project A	NPV Project B
0%	$890	$398
5	($370)	($373)
10	($337)	($387)
12	($331)	($389)
15	($325)	($391)
18.1	($321)	($393)
24.18	($316)	($394)

Workings