еВookProblem Walk-ThroughA company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:123457Project A-$300-$387-$193-$100$600$600$850-$180Project B-$400$133$133$133$133$133$133$0 e. 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 RateNPV Project ANPV Project B0%$42$10121518.124.18

Given, Project A and Project B with the cash flows. The WACC is 12%.

A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 4 7 + Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180 Project B -$400 $133 $133 $133 $133 $133 $133 $0

A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 4 7 + Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180 Project B -$400 $133 $133 $133 $133 $133 $133 $0

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 4 7 Discount Rate 0% 5 10 0 12 15 18.1 3 5 + Project A -$300 -$387 -$193 -$100 -$400 $131 $131 $131 + $600 $600 $850 $131 $131 $131 -$180 $0 Project B a. 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: $ b. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places. Project A: Project B: c. 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: d. From your answers to parts a-c, which project would be selected? -Select- If the WACC was 18%, which project would be selected? -Select- e. Construct NPV profiles for Projects A and…
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 Year 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 Open spreadsheet What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. Project A: $ fill in the blank 2 Project B: $ fill in the blank 3 What is each project's IRR? Round your answer to two decimal places. Project A: fill in the blank 4% Project B: fill in the blank 5% 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. Project A: fill in the blank 6% Project B: fill in the blank 7%…
A company has an 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 0 1 -Select- 2 3 7 + Project A -$387 -$193 -$100 $600 $600 $850 -$300 -$405 1 -$180 $0 Project B $131 $131 $131 $131 $131 $131 a. 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: $ b. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places. Project A: Project B: c. 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: d. From your answers to parts a-c, which project would be selected? % 4 % % 5 6 If the WACC was 18%, which project would be selected? -Select- e. Construct NPV profiles for Projects A and B. If an amount is…
еВook Problem Walk-Through A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 1 3 5 6 Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180 Project B -$400 $133 $133 $133 $133 $133 $133 $0 a. 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: $ b. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places. Project A: % Project B: c. 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: % d. From your answers to parts a-c, which project would be selected? -Select- If the WACC was 18%, which project would be selected? -Select-
A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: Project A: -300, -387, -193, -100, 600, 600, 850, -180Project B: -400, 135, 135, 135, 135, 135, 135, 0 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?project A $project B $Formula:b. What is each project's IRR?project A $project B $Formula:c. What is each project's MIRR?project A $project B $Formula:d.1 From your answers to Parts a, b, and c, which project would be selected? d.2 If the WACC was 18%, which project would be selected?e. Construct NPV profiles for Projects A and Bdiscount rate NPV PLAN B. NPV PLAN B Discount Rate NPV Project A NPV Project B 0% $ $ 5 10 12 15 18.1 24.83 Formula:f. Calculate the crossover rate where the two projects' NPVs are equal.Formula:g. What is each…
A company has a 12% 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 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 24.51
A company has a 12% 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 + + + + + + ㅓ Project A Project B -$300 -$405 -$387 $133 -$193 -$100 $133 $133 $600 $133 $600 $133 $850 -$180 $133 $0 a. 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: $ b. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places. Project A: Project B: % % c. 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: % % d. From your answers to parts a-c, which project would be selected? -Select- If the WACC was 18%, which project would be selected? -Select- e. Construct NPV profiles for Projects A and B. If an…
A company has a 12% WACC and is considering two mutually exclusive Investments (that cannot be repeated) with the following cash flows: ° 1 2 3 4 5 6 7 Project A Project B -$300 -$400 -$387 $131 -$193 -$100 $600 $131 $131 $131 $600 $850 $131 $131 -$180 $0 a. 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: $ b. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places. Project A: Project B: % % c. 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: % % d. From your answers to parts a-c, which project would be selected? -Select- v If the WACC was 18%, which project would be selected? -Select- ▼ e. Construct NPV profiles for Projects A and B. If an amount is…
еВook 目 Problem Walk-Through A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 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 a. 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: $ -178.94 Project B: $ -131.09
A company has a 11% 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 $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. a. Project A: $ b. Project B: $ 3 What is each project's IRR? Round your answer to two decimal places. c. Project A:% d. Project 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. e. Project A: % f. Project B: % g. From your answers to parts a-c, which project would be selected? h. If the WACC was 18%, which project would be selected? Construct NPV profiles for Projects A and B. Round your answers to the nearest cent.…
A company has a 11% 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. Open spreadsheet What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. Project A: $ fill in the blank 2 Project B: $ fill in the blank 3 What is each project's IRR? Round your answer to two decimal places. Project A: fill in the blank 4% Project B: fill in the blank 5% 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.…
NPV and IRR Analysis Cummings Products Company is considering two mutually exclusive investments whose expected net cash flows are as follows: EXPECTED NET CASH FLOWS Year Project A Project B 0 -$300 -$405 1 -387 134 2 -193 134 3 -100 134 4 600 134 5 600 134 6 850 134 7 -180 134 What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places. Project A %Project B % Calculate the two projects' NPVs, if you were told that each project's cost of capital was 10%. Do not round intermediate calculations. Round your answers to the nearest cent.Project A $Project B $Calculate the two projects' NPVs, if the cost of capital was 17%. Do not round intermediate calculations. Round your answers to the nearest cent.Project A $Project B $

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