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In: Finance
Payback, NPV, and MIRR Your division is considering two investment projects, each of which requires an...
Payback, NPV, and MIRR
Your division is considering two investment projects, each of which requires an up-front expenditure of $22 million. You estimate that the cost of capital is 10% 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 regular payback period for each of the projects?
Round your answers to two decimal places.
Project A years
Project B years - What is the discounted payback period for each of the projects?
Round your answers to two decimal places.
Project A years
Project B years - If the two projects are independent and the cost of capital is
10%, which project or projects should the firm undertake?
-Select-Project AProject BBoth projectsItem 5 - If the two projects are mutually exclusive and the cost of
capital is 5%, which project should the firm undertake?
-Select-Project AProject BItem 6 - If the two projects are mutually exclusive and the cost of
capital is 15%, which project should the firm undertake?
-Select-Project AProject BItem 7 - What is the crossover rate? Round your answer to two decimal
places.
% - If the cost of capital is 10%, what is the modified IRR (MIRR)
of each project? Round your answers to two decimal places.
Project A %
Project B %
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Payback, NPV, and MIRR Your division is considering two investment projects, each of which requires an...
Payback, NPV, and MIRR
Your division is considering two investment projects, each of
which requires an up-front expenditure of $24 million. You estimate
that the cost of capital is 9% 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 regular payback period for each of the projects?
Round your answers to two decimal places....
Payback, NPV, and MIRR Your division is considering two investment projects, each of which requires an...
Payback, NPV, and MIRR
Your division is considering two investment projects, each of
which requires an up-front expenditure of $23 million. You estimate
that the cost of capital is 9% 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 regular payback period for each of the projects?
Round your answers to two decimal places....
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Your division is considering two investment projects, each of
which requires an up-front expenditure of $15 million. You estimate
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Year
Project A
Project B
1
$ 5,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
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What are the two projects' net present values, assuming the cost
of capital is 5%? Do not round intermediate calculations. Round
your answers to the nearest dollar.
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Project B: $
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Your division is considering two investment projects, each of
which requires an up-front expenditure of $17 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 4,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Do not round intermediate calculations. Round
your answers to the nearest dollar.
Project A: $
Project B: $
What are the...
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NPV Your division is considering two investment projects, each
of which requires an up-front expenditure of $23 million. You
estimate that the investments will produce the following net cash
flows: Year Project A Project B 1 $ 5,000,000 $20,000,000 2
10,000,000 10,000,000 3 20,000,000 6,000,000
What are the two projects' net present values, assuming the cost
of capital is 5%? Round your answers to the nearest dollar.
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What are the two projects' net present...
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Your division is considering two investment projects, each of
which requires an up-front expenditure of $23 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
$ 6,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
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What are the two projects' net present values, assuming the
cost of capital is 5%? Round your answers to the nearest
dollar.
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Project B $
What are the two projects' net present values,...
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Your division is considering two investment projects, each of
which requires an up-front expenditure of $17 million. You estimate
that the investments will produce the following net cash flows:
Year
Project A
Project B
1
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$20,000,000
2
10,000,000
10,000,000
3
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Project B $
What are the two projects' net present values,...
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Your division is considering two investment projects, each of
which requires an up-front expenditure of $23 million. You estimate
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Year
Project A
Project B
1
$ 5,000,000
$20,000,000
2
10,000,000
10,000,000
3
20,000,000
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What are the two projects' net present values, assuming the
cost of capital is 5%? Round your answers to the nearest
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Project B $
What are the two projects' net present values,...
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Your division is considering two investment projects, each of
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Year
Project A
Project B
1
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$20,000,000
2
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3
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What are the two projects' net present values, assuming the cost
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$20,000,000
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