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Unformatted text preview: *Recall: The NPV function has a flaw. You must find the NPV of Cash Flows 1-5 and then add CF0. To find Modified IRR, use the required rate as both the reinvestment rate and the finance rate. OUTPUTS NPV IRR MIRR Project 1 Project 2 Find the NPV's of the projects at the following rates. Required Rate 0% 5% 10% 15% 20% 25% NPV Project 1 NPV Project 2 Graph the NPV Profiles of both projects on the same graph. Use a line chart with markers. Label graph well and insert it in the space below. Point out the IRR's of the projects and the crossover point (using arrows and lines). Calculate the crossover rate (with at least 2 decimals) and enter it the next row. You can do this on a separate piece of paper or in a separate spreadsheet. If projects 1 and 2 are mutually exclusive, at what range of required rates would you accept each project? Preview page, make sure it looks great. Format it to print on ONE page (do not delete anything)....
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This note was uploaded on 12/11/2011 for the course FINC 3630 taught by Professor Jensen,m during the Summer '08 term at Auburn University.
- Summer '08