Please, i need to decimal points in each answer. Thank you. A company has a 13%
ID: 2799258 • Letter: P
Question
Please, i need to decimal points in each answer.
Thank you.
A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows: 2 4 7 Project A$300 $387 $193 $100 $600 $600 $850$180 Project B $400 $131 $131 $131 $131 $131 $131 $0 a. What is each project's NPV? Round your answer to the nearest cent. Project A $ 162.48 Project B 123.68 b. What is each project's IRR? Round your answer to two decimal places | 90 Project A 18.10 Project B 23.54 % c. 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 Project A 15.60 Project B 17.43 | % d. From your answers to parts a-c, which project would be selected? Project A If the WACC was 18%, which project would be selected? Project B e. Construct NPV profiles for Plans A and B. Round your answers to the nearest cent NPV Plan A $890 scount Rate PV Plan B 096 $ 400 10 12 15 18.1 23.54Explanation / Answer
Cashflows 0 1 2 3 4 5 6 7 Project A a -300 -387 -193 -100 600 600 850 -180 Project B b -400 131 131 131 131 131 131 0 Present Value Factor @ 0% c 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Present Value Factor @ 5% d 1.0000 0.9524 0.9070 0.8638 0.8227 0.7835 0.7462 0.7107 Present Value Factor @ 10% e 1.0000 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 Present Value Factor @ 12% f 1.0000 0.8929 0.7972 0.7118 0.6355 0.5674 0.5066 0.4523 Present Value Factor @ 15% g 1.0000 0.8696 0.7561 0.6575 0.5718 0.4972 0.4323 0.3759 Present Value Factor @ 18.1% h 1.0000 0.8467 0.7170 0.6071 0.5140 0.4353 0.3686 0.3121 Present Value Factor @ 23.54% i 1.0000 0.8095 0.6552 0.5304 0.4293 0.3475 0.2813 0.2277 Project A 0 1 2 3 4 5 6 7 Total NPV @ 0% j = a*c -$300.00 -$387.00 -$193.00 -$100.00 $600.00 $600.00 $850.00 -$180.00 $890.00 NPV @ 5% k = a*d -$300.00 -$368.57 -$175.06 -$86.38 $493.62 $470.12 $634.28 -$127.92 $540.09 NPV @ 10% l = a*e -$300.00 -$351.82 -$159.50 -$75.13 $409.81 $372.55 $479.80 -$92.37 $283.34 NPV @ 12% m = a*f -$300.00 -$345.54 -$153.86 -$71.18 $381.31 $340.46 $430.64 -$81.42 $200.41 NPV @ 15% n = a*g -$300.00 -$336.52 -$145.94 -$65.75 $343.05 $298.31 $367.48 -$67.67 $92.96 NPV @ 18.1% o = a*h -$300.00 -$327.69 -$138.37 -$60.71 $308.43 $261.16 $313.27 -$56.17 -$0.09 NPV @ 23.54% p = a*i -$300.00 -$313.26 -$126.46 -$53.04 $257.59 $208.50 $239.10 -$40.98 -$128.55 Project B 0 1 2 3 4 5 6 7 Total NPV @ 0% q = b*c -$400.00 $131.00 $131.00 $131.00 $131.00 $131.00 $131.00 $0.00 $386.00 NPV @ 5% r = b*d -$400.00 $124.76 $118.82 $113.16 $107.77 $102.64 $97.75 $0.00 $264.92 NPV @ 10% s = b*e -$400.00 $119.09 $108.26 $98.42 $89.47 $81.34 $73.95 $0.00 $170.54 NPV @ 12% t = b*f -$400.00 $116.96 $104.43 $93.24 $83.25 $74.33 $66.37 $0.00 $138.59 NPV @ 15% u = b*g -$400.00 $113.91 $99.05 $86.13 $74.90 $65.13 $56.63 $0.00 $95.77 NPV @ 18.1% v = b*h -$400.00 $110.92 $93.92 $79.53 $67.34 $57.02 $48.28 $0.00 $57.01 NPV @ 23.54% w = b*i -$400.00 $106.04 $85.83 $69.48 $56.24 $45.52 $36.85 $0.00 -$0.04