Question

# Project L requires an initial outlay at t = 0 of \$50,000, its expected cash inflows...

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 at t = 0 of \$32,000, and its expected cash flows would be \$7,600 per year for 5 years. If both projects have a WACC of 14%, which project would you recommend?

 a. Both Projects S and L, since both projects have NPV's > 0.
 b. Neither Project S nor L, since each project's NPV < 0.
 c. Project L, since the NPVL > NPVS.
 d. Project S, since the NPVS > NPVL.
 e. Both Projects S and L, since both projects have IRR's > 0.

Q-1:

Calc:

Q-2:

Calc:

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