Ch11_P1sol - NPV, PI, IRR, and MIRR. If the projects are...

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Chapter 11, Problem 1 Solution 1. You are considering an investment in two projects, A and B. Both projects will cost $50,000, and the projected cash flows are as follows: Year Project A Project B 1 20,000 35,000 2 25,000 30,000 3 30,000 25,000 4 35,000 20,000 5 40,000 15,000 a. Assuming that the WACC is 12%, calculate the payback period, discounted payback period,
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Unformatted text preview: NPV, PI, IRR, and MIRR. If the projects are mutually exclusive, which project should be selected? Worksheet: Formulas: b. Create an NPV profile chart for projects A and B. What is the exact crossover rate for these two projects? Worksheet: Formulas: -20,000 20,000 40,000 60,000 80,000 100,000 120,000 0% 10% 20% 30% 40% 50% 60% 70% NPV Profiles NPVA NPVB...
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Ch11_P1sol - NPV, PI, IRR, and MIRR. If the projects are...

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