Question

1. ABC Corporation is considering a project that provides the following cash flows steam:

Year	0	1	2	3	4	5
Cash flows	-$1,000	$375	$425	$250	$110	$100

1. If WACC is 10%, what is NPV and should the company accept the project?

2. Find IRR, MIRR, payback, and discounted payback period.

2. Considering the following projects.

Project	Year	0	1	2	3	4
A	Cash flows	-$100	$35	$35	$35	$35
B	Cash flows	-$100	$60	$50	$40	$30

Project A has WACC = 6.00% while project B has WACC = 8.50%.

1. If these two projects are mutually exclusive, which project should the company accept based on the NPV, IRR, MIRR, payback, and discounted payback period for each project?

2. Would your decision (Your answer from part A) change if these two projects were independent?

Kindly be aware that this question had been answered previously with screenshots answer, which was not a clear answer for a beginner. Details are appreciated.

Answer 1

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