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Unformatted text preview: Chapter 11 Homework 111 NPV: Project K costs $52,125, its expected net cash inflows are $12,000 per year for 8 years, and its WACC is 12%. What is the projects NPV? 112 IRR: Refer to Problem 111. What is the projects IRR? 113 MIRR: Refer to Problem 111. What is the projects MIRR? 114 PAYBACK PERIOD: Refer to Problem 111. What is the projects payback? 115 DISCOUNTED PAYBACK: Refer to Problem 111. What is the projects discounted payback? 116 NPV: Your division is considering two projects with the following net cash inflows (in millions): 1 2 3     Project A $25 $5 $10 $17 Project B $20 $10 $9 $6 a. What are the projects NPVs assuming the WACC is 5%? 10%? 15%? b. What are the projects IRRs at each of these WACCs? c. If the WACC was 5% and A and B were mutually exclusive, which project would you choose? What is the WACC was 10%? 15%? (Hint: The crossover rate is 7.81%) 1110 CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS:...
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 Spring '11
 lawrence
 Finance

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