Question
In: Finance
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
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 | $135 | $135 | $135 | $135 | $135 | $135 | $0 |
a. What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
b. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Round your answer to two decimal places. Do not round your intermediate calculations.
c. Construct NPV profiles for Projects A and B. Round your answers to the nearest cent. Do not round your intermediate calculations. Negative value should be indicated by a minus sign.
d. Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to two decimal places. Do not round your intermediate calculations.
e. What is each project's MIRR at a WACC of 18%? Round your answer to two decimal places. Do not round your intermediate calculations.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
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
-$405
$133
$133
$133
$133
$133
$133
$0
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:...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
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
-$405
$132
$132
$132
$132
$132
$132
$0
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:...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
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
$134
$134
$134
$134
$134
$134
$0
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:...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
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
-$405
$135
$135
$135
$135
$135
$135
$0
The data has been collected in the Microsoft Excel Online file
below. Open the spreadsheet and perform the required analysis to
answer the questions below.
Open spreadsheet
What is each...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
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 -$405 $133 $133 $133 $133 $133 $133 $0
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:...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
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
$131
$131
$131
$131
$131
$131
$0
What is each project's NPV? Round your answer to the nearest
cent. Do not round your intermediate calculations.
Project A $
Project B $
What is each project's IRR? Round...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
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
$135
$135
$135
$135
$135
$135
$0
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:...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
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
-$405
$134
$134
$134
$134
$134
$134
$0
The data has been collected in the Microsoft Excel Online file
below. Open the spreadsheet and perform the required analysis to
answer the questions below.
Spreadsheet data :
Capital budgeting...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
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 -$405 $132 $132 $132 $132 $132 $132 $0
What is each project's NPV? Round your answer to the nearest cent.
Do not round your intermediate calculations. Project A $ Project B
$ What is each project's IRR? Round...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
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
What is each project's NPV? Round your answer to the nearest
cent.
Project A $
Project B $
What is each project's IRR? Round your answer to two decimal
places....
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