Due Tuesday Morning EST
mossmuPlease remember when I submit each question it will show if it is wrong or right, please I need correct answers.
Problem 11-6 NPV
Your division is considering two projects with the following cash flows (in millions):
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Project A |
-$27 |
$13 |
$17 |
$8 |
Project B |
-$25 |
$14 |
$11 |
$2 |
a. What are the projects' NPVs assuming the WACC is 5%? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Project A $ million Project B $ million
What are the projects' NPVs assuming the WACC is 10%? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Project A $ million Project B $ million
What are the projects' NPVs assuming the WACC is 15%? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Project A $ million Project B $ million
b. What are the projects' IRRs assuming the WACC is 5%? Round your answer to two decimal places. Project A % Project B %
What are the projects' IRRs assuming the WACC is 10%? Round your answer to two decimal places. Project A % Project B %
What are the projects' IRRs assuming the WACC is 15%? Round your answer to two decimal places. Project A % Project B %
c. If the WACC were 5% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 90.37%.)
If the WACC were 10% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 90.37%.)
If the WACC were 15% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 90.37%.)
Problem 11-10 Capital budgeting criteria: mutually exclusive projects
A firm with a WACC of 10% is considering the following mutually exclusive projects:
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Project A |
-$400 |
$45 |
$45 |
$45 |
$190 |
$190 |
Project B |
-$500 |
$350 |
$350 |
$60 |
$60 |
$60 |
Which project would you recommend?
Select the correct answer.
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NPV
Project K costs $50,000, its expected cash inflows are $9,000 per year for 9 years, and its WACC is 9%. What is the project's NPV? Round your answer to the nearest cent.
$
Problem 11-11 Capital budgeting criteria: mutually exclusive projects
Project S costs $10,000 and its expected cash flows would be $7,000 per year for 5 years. Mutually exclusive Project L costs $27,000 and its expected cash flows would be $10,200 per year for 5 years. If both projects have a WACC of 12%, which project would you recommend?
Select the correct answer.
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Problem 11-2 IRR
Project K costs $69,862.90, its expected cash inflows are $14,000 per year for 10 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places.
%
Problem 11-12 IRR and NPV
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:
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Project S |
-$1,000 |
$861.63 |
$250 |
$15 |
$15 |
Project L |
-$1,000 |
$0 |
$260 |
$400 |
$813.35 |
The company's WACC is 8.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.
%
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