cengage mindtap ch 11 end of chapter problems the basics of capital bu
Question
CENGAGE MINDTAP
Ch 11-End-of-Chapter Problems - The Basics of Capital Budgeting
Average/25
Attempts
5. Problem 11.17 (Capital Budgeting Criteria)
eBook
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:
0
1
5
Project A
Project B
2
-$300 -$387
-$193 -$100 $600
$600 $850 -$180
-$405 $131 $131 $131 $131 $131 $131 50
Q Sear
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