Problem 11-7 Capital budgeting criteria A firm with a 13% WACC is evaluating two

Question

Problem 11-7 Capital budgeting criteria A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 2 3 4 Project M $27,000 $9,000 $9,000 $9,000 $9,000 $9,000 Project N -$81,000 $25,200 $25,200 $25,200 $25,200 $25,200 a. Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations Project M $ Project N $ Calculate IRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations Project M Project N Calculate MIRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations Project M Project N Calculate payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations Project M Project N Calculate discounted payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations Project M Project N years years years years

Explanation / Answer

NPV for both projects

1.a) 4119.54

b) 6755.95

2 IRR

a)20%

b) 17%

3

a)17%

b) 15%

4)

a) 3

b) 3.21

5) Discounted payback period

a)4.008

c) 4.74

Pleas ask other question in another question

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---