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Dalton Products is considering two mutually exclusing investments whose expected net cash flows are as follows:


Expected Net Cash Flows
Year Project A Project B
0 -$500 -$700
1 -565 220
2 -200 220
3 -140 220
4 1,200 220
5 830 220
6 950 220
7 -330 220

a. Construct NPV profiles for Projects A and B

b. What is each project's IRR?

c. If each project's cost of capital were 10%, which project, if either, should be selected?

d. What is each project's MIRR at the cost of capital of 10%? At 18%?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M93052522

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