For the following projects, compute NPV, IRR, MIRR, profitability index, and payback. If these projects are mutually exclusive, which
one(s) should be done? If they are independent, which one(s) should be undertaken?
A B C D
Year 0 ($1,000) ($1,500) ($500) ($2,000)
Year 1 $400 $500 $100 $600
Year 2 $400 $500 $300 $800
Year 3 $400 $700 $250 $200
Year 4 $400 $200 $200 $300
Discount Rate 10% 12% 15% 8%
For the following projects, compute NPV, IRR, MIRR, profitability index, and payback. If these projects are mutually exclusive, which
one(s) should be done? If they are independent, which one(s) should be undertaken?
A B C D
Year 0 ($1,000) ($1,500) ($500) ($2,000)
Year 1 $400 $500 $100 $600
Year 2 $400 $500 $300 $800
Year 3 $400 $700 $250 $200
Year 4 $400 $200 $200 $300
Discount Rate 10% 12% 15% 8%
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Related questions
Your division is considering two investment projects, each of which requires an up-front expenditure of $24 million. You estimate that the cost of capital is 9% and that the investments will produce the following after-tax cash flows (in millions of dollars):
(10 points)
| Year | Project A | Project B |
| 1 | 5 | 20 |
| 2 | 10 | 10 |
| 3 | 15 | 8 |
| 4 | 20 | 6 |
What is the regular payback period for each of the projects? Round your answers to two decimal places.
Project A years
Project B years
What is the discounted payback period for each of the projects? Round your answers to two decimal places.
Project A years
Project B years
If the two projects are independent and the cost of capital is 10%, which project or projects should the firm undertake?
If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake?
If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake?
What is the crossover rate? Round your answer to two decimal places.
%
If the cost of capital is 10%, what is the modified IRR (MIRR) of each project? Round your answers to two decimal places.
Project A %
Project B %
