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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

  1. What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.

  2. What is each project's IRR? Round your answer to two decimal places.

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

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Answer #1
Year Project A Project B
0 -300 -400
1 -387 133
2 -193 133
3 -100 133
4 600 133
5 600 133
6 850 133
7 -180 0
IRR 18.10% 24.18%
NPV $200.41 $146.82
MIRR 16.34% 17.12%

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