Capital budgeting criteria a company has a 12 wacc and is, Ask an Expert

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Capital budgeting criteria 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 $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. Project A % 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. Project A % Project B % From your answers to parts a-c, which project would be selected? If the WACC was 18%, which project would be selected? Construct NPV profiles for Plans A and B. Round your answers to the nearest cent. Discount Rate NPV Plan A NPV Plan B 0% $ $ 5 $ $ 10 $ $ 12 $ $ 15 $ $ 18.1 $ $ 24.18 $ $ Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to two decimal places. % What is each project's MIRR at a WACC of 18%? Round your answer to two decimal places. Project A % Project B %

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Financial Management, Finance

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