Question

A firm is considering the two mutually exclusive investments projects. Project Alpha requires an initial outlay of $600 and will return $160 per year for the next seven years; Project Beta requires an initial outlay of $1,100 and will return $350 per year for the next five years. Assuming a 11% required return, calculate the NPV, Payback Period, and MIRR of each project. Please help by showing Excel calculations. Thanks! |

Answer #1

Solve
the problems below using well-formatted Excel solutions. Do not
hardcode numbers in the formulas…..only use cell references to the
input data. I will change the input data in your problem to check
alternate solutions. You will turn in a complete working Excel
spreadsheet with your solution.
1. A firm is
considering the two mutually exclusive investments projects.
Project Alpha requires an initial outlay of $600 and will return
$160 per year for the next seven years; Project Beta requires...

Solve the problems below using
well-formatted Excel solutions. Do not hardcode numbers in the
formulas…..only use cell references to the input data. I will
change the input data in your problem to check alternate solutions.
You will turn in a complete working Excel spreadsheet with your
solution.
1. A firm is considering the two mutually
exclusive investments projects. Project Alpha requires an initial
outlay of $600 and will return $160 per year for the next seven
years; Project Beta requires...

A firm needs to decide between two mutually exclusive projects.
Project Alpha requires an initial investment of $37,000 today and
is expected to generate cash flows of $31,000 for the next 4 years.
Project Beta requires an initial investment of $92,000 and is
expected to generate cash flows of $36,400 for the next 8 years.
The cost of capital is 10%. The projects can be repeated with no
change in cash flows. What is the NPV of the project that...

Project X and Project Y are two mutually exclusive projects.
Project X requires an initial outlay of $38,000 and generates a net
cash flow of $14,000 per year for six years. Project Y requires an
initial outlay of $52,000, and will generate cash flows of $15,300
per year for eight years. Which project should be chosen and why?
(Assume that the discount rate for both projects is 10
percent).
A. Project X because Project X has
a larger NPV than Project...

A firm needs to decide between two mutually exclusive projects.
Project Alpha requires an initial investment of 50,000 today and is
expected to generate cash flows of 51,000 for the next 3 years.
Project Beta requires an intial investment of 85,000 and is
expected to generate cash flows of 49,700 for the next 6 years. The
cost of capital is 6%. The projects can be repeated with no charge
in cash flows. What is the NPV of the project that...

18) a firm needs to decide between two mutually exclusive
projects. Porject Alpha requires an initial investment of $29,000
today and is expected to generate cash flow of $43,000 for the next
3 years. Project Beta requires an initial investment of $60,000 and
is expected to generate cash flows of $45,000 for the next 6 years.
The cost of capital is 11%. The projects can be repeated with no
change in cash flows. What is the NPV of the project...

Project L requires an initial outlay at t = 0 of $50,000, its
expected cash inflows are $15,000 per year for 9 years, and its
WACC is 9%. What is the project's MIRR? Do not round intermediate
calculations. Round your answer to two decimal places.
= %
Project S requires an initial outlay at t = 0 of $12,000, and
its expected cash flows would be $6,500 per year for 5 years.
Mutually exclusive Project L requires an initial outlay...

Shell Camping Gear, Inc., is considering two mutually
exclusive projects. Each requires an initial investment of
$140,000. John Shell, president of the company, has set a
maximum payback period of 4 years. The after-tax cash inflows
associated with each project are shown in the following
table:
1 20,000 50,000
2 30,000 40,000
3 40,000 30,000
4 50,000 20,000
5 30,000 30,000
a. Determine the payback period of each project.
b. Because they are mutually exclusive, Shell must choose one.
Which...

Project S requires an initial outlay at t = 0 of $18,000, and
its expected cash flows would be $5,000 per year for 5 years.
Mutually exclusive Project L requires an initial outlay at t = 0 of
$43,000, and its expected cash flows would be $12,000 per year for
5 years. If both projects have a WACC of 12%, which project would
you recommend? Select the correct answer.
a. Both Projects S and L, since both projects have NPV's...

Project S requires an initial outlay at t = 0 of $10,000, and
its expected cash flows would be $6,500 per year for 5 years.
Mutually exclusive Project L requires an initial outlay at t = 0 of
$50,000, and its expected cash flows would be $13,750 per year for
5 years. If both projects have a WACC of 16%, which project would
you recommend? Select the correct answer. a. Project L, since the
NPVL > NPVS. b. Project S,...

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