11-7 CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 3. 4. + Project M Project N -$30,000 -$90,000 $10,000 $28,000 + $10,000 $28,000 $10,000 $28,000 $10,000 $28,000 $10,000 $28,000 a. Calculate NPV, IRR, MIRR, payback, and discounted payback for each project. b. Assuming the projects are independent, which one(s) would you recommend?

Fundamentals of Financial Management (MindTap Course List)
15th Edition
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter11: The Basics Of Capital Budgeting
Section: Chapter Questions
Problem 11P: CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS Project S costs 17,000, and its expected...
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11-7 CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for
this year's capital budget. After-tax cash flows, including depreciation, are as follows:
3.
4
+
Project M
Project N
-$30,000
-$90,000
$10,000
$28,000
+
$10,000
$28,000
$10,000
$28,000
$10,000
$28,000
$10,000
$28,000
a. Calculate NPV, IRR, MIRR, payback, and discounted payback for each project.
b. Assuming the projects are independent, which one(s) would you recommend?
Transcribed Image Text:11-7 CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 3. 4 + Project M Project N -$30,000 -$90,000 $10,000 $28,000 + $10,000 $28,000 $10,000 $28,000 $10,000 $28,000 $10,000 $28,000 a. Calculate NPV, IRR, MIRR, payback, and discounted payback for each project. b. Assuming the projects are independent, which one(s) would you recommend?
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