Ch 11-End-of-Chapter Problems - The Basics of Capital Budgeting

b. What is each project's IKK? Do not round intermediate calculations. Round your answers to two decimal places.

Project A:

Project 5:

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?

If the WACC was 18%, which project would be selected?

-Select-

Project A IPV 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

Project B

rs to the nearest cent.

Discount Rate

0%

5

10

12

15

18.1

23.01

$

f. Calculate the crossover rate where the two projects NPVs are equal. Do not round intermediate calculations. Round your answer to two decimal places.

Discount Rate

0%

5

NPV Project A

g. What is each project's MIRR at a WACC of 18%? Do not round intermediate calculations. Round your answers to two decimal places.

Denier &

If the WACC was 18%, which project would be selected?

10

NFV Project

e. Construct NPV profiles for Projects A and B. If an amount is zero, enter O. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round

your answers to the nearest cent.

NPV Project A

$

S

Search this cour

NPV Project

23.01

f. Calculate the crossover rate where the two projects' NPVS are equal. Do not round intermediate calculations. Round your answer to two decimal places.

g. What is each project's MIRR at a WACC of 18%? Do not round intermediate calculations. Round your answers to two decimal places.

Project A

Project Br