Question

NPV and IRR Analysis Cummings Products Company is considering two mutually exclusive investments whose expected net...

NPV and IRR Analysis

Cummings Products Company is considering two mutually exclusive investments whose expected net cash flows are as follows:

EXPECTED NET CASH FLOWS
Year Project A Project B
0 -$300 -$405
1 -387 134
2 -193 134
3 -100 134
4 600 134
5 600 134
6 850 134
7 -180 134

What is each project's MIRR at a cost of capital of 10%? (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  %

What is each project's MIRR at a cost of capital of 17%? (Hint: Consider Period 7 as the end of Project B's life.) Do not round intermediate calculations. Round your answer to two decimal places.

Project A  %

Project B  %

What is the crossover rate? Do not round intermediate calculations. Round your answer to two decimal places.
%

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Cummings Products Company is considering two mutually exclusive investments whose expected net cash flows are as...
Cummings Products Company is considering two mutually exclusive investments whose expected net cash flows are as follows: EXPECTED NET CASH FLOWS Year Project A Project B 0 -$320 -$360 1 -387 134 2 -193 134 3 -100 134 4 600 134 5 600 134 6 850 134 7 -180 134 What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places Calculate the two projects' NPVs, if you were told that each project's cost...
13. NPV and IRR Analysis Cummings Products Company is considering two mutually exclusive investments whose expected...
13. NPV and IRR Analysis Cummings Products Company is considering two mutually exclusive investments whose expected net cash flows are as follows: Expected Net Cash Flows Year Project A Project B 0 -$400 -$650 1 -528 210 2 -219 210 3 -150 210 4 1,100 210 5 820 210 6 990 210 7 -325 210 Select the correct graph for NPV profiles for Projects A and B.     The correct graph is (select one) graph __? What is each project's...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 0 1 2 3 4 5 6 7 Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180 Project B -$405 $134 $134 $134 $134 $134 $134 $0 The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What is each...
A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be...
A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 0 1 2 3 4 5 6 7 Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180 Project B -$400 $133 $133 $133 $133 $133 $133 $0 What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. What is each project's IRR? Round your answer to two decimal places....
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be...
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 0 1 2 3 4 5 6 7 Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180 Project B -$405 $131 $131 $131 $131 $131 $131 0 A. What is each project's NPV? Round your answer to the nearest cent. Project A: Project B: B. What is each project's IRR? Round your answer to two decimal places....
A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be...
A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 0 1 2 3 4 5 6 7 Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180 Project B -$400 $135 $135 $135 $135 $135 $135 $0 What is each project's NPV? Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent. Project A:...
A company has an 11% WACC and is considering two mutually exclusive investments (that cannot be...
A company has an 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 0 1 2 3 4 5 6 7 Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180 Project B -$400 $133 $133 $133 $133 $133 $133 $0 What is each project's NPV? Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent. Project A:...
Gardial Fisheries is considering two mutually exclusive investments. The projects' expected net cash flows are as...
Gardial Fisheries is considering two mutually exclusive investments. The projects' expected net cash flows are as follows: Expected Net Cash Flows Time Project A Project B 0 ($375) ($575) 1 ($300) $190 2 ($200) $190 3 ($100) $190 4 $600 $190 5 $600 $190 6 $926 $190 7 ($200) $0 a. If each project's cost of capital is 12%, which project should be selected? If the cost of capital is 18%, what project is the proper choice? @ 12% cost...
MIRR and NPV Your company is considering two mutually exclusive projects, X and Y, whose costs...
MIRR and NPV Your company is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below: Year X Y 0 -$5,000 -$5,000 1 1,000 4,500 2 1,500 1,500 3 2,000 1,000 4 4,000 500 The projects are equally risky, and their cost of capital is 15%. You must make a recommendation, and you must base it on the modified IRR (MIRR). Calculate the two projects' MIRRs. Do not round intermediate calculations. Round your answers...
Assume you are given these mutually exclusive investments with the expected net cash flows as in...
Assume you are given these mutually exclusive investments with the expected net cash flows as in the table: Year Project A Project B 0 -400.00 -670 1 -528.00 210 2 -219.00 210 3 -250.00 210 4 1100.00 210 5 820.00 210 6 990.00 210 7 -325.00 210 Respond to the questions: Question 1: What is each project’s IRR? If each project’s cost of capital were 10%, which project, if either, should be selected? If the cost of capital were 17%,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT