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- Start with the partial model in the file Ch10 P23 Build a Model.xlsx on the textbooks Web site. Gardial Fisheries is considering two mutually exclusive investments. The projects expected net cash flows are as follows: a. If each projects cost of capital is 12%, which project should be selected? If the cost of capital is 18%, what project is the proper choice? b. Construct NPV profiles for Projects A and B. c. What is each projects IRR? d. What is the crossover rate, and what is its significance? e. What is each projects MIRR at a cost of capital of 12%? At r = 18%? (Hint: Consider Period 7 as the end of Project Bs life.) f. What is the regular payback period for these two projects? g. At a cost of capital of 12%, what is the discounted payback period for these two projects? h. What is the profitability index for each project if the cost of capital is 12%?Question 26 Miller and Sons is evaluating a project with the following cash flows: Year Cash Flows 0 -$150,000 1 20,000 2 45,000 3 100,000 4 30,000 5 -10,000 The company uses a 7 percent reinvestment rate and a 12 percent discount rate on all of its projects. What is the MIRR of the project using the discount approach? Hint: This information will be used on three related MIRR problems. Group of answer choices 7.76 percent 9.05 percent 8.74 percent 7.05 percent 7.92 percent6.Wainright Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 720 2 930 3 1,190 4 1,275 If the discount rate is 10 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $ What is the present value at 18 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $ What is the present value at 24 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $
- Question 27 PART 1 Miller and Sons is evaluating a project with the following cash flows: Year Cash Flows 0 -$150,000 1 20,000 2 45,000 3 100,000 4 30,000 5 -10,000 The company uses a 7 percent reinvestment rate and a 12 percent discount rate on all of its projects. What is the MIRR of the project using the reinvestment approach? Hint: This information will be used on three related MIRR problems. Group of answer choices 7.76 percent 9.05 percent 8.74 percent 7.05 percent 7.92 percent Question 27 PART 2 Miller and Sons is evaluating a project with the following cash flows: Year Cash Flows 0 -$150,000 1 20,000 2 45,000 3 100,000 4 30,000 5 -10,000 The company uses a 7 percent reinvestment rate and a 12 percent discount rate on all of its projects. What is the MIRR of the project using the combination approach? Hint: This information will be used on three related MIRR problems. Group of answer…Exercise 14A-1 (Algo) Basic Present Value Concepts [LO14-7] Annual cash inflows that will arise from two competing investment projects are given below: Year Investment A Investment B 1 $ 7,000 $ 10,000 2 8,000 9,000 3 9,000 8,000 4 10,000 7,000 $ 34,000 $ 34,000 The discount rate is 5%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment.Question 9 Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$50,000 -$25,000 1 $25,000 $10,000 2 $10,000 $10,000 3 $10,000 $10,000 4 $20,000 $5,000 Whichever project you choose, if any, you require a 10 percent return on your investment. If you apply the payback criterion, you will choose investment _____, if you apply the NPV criterion, you will choose investment _____; if you apply the IRR criterion, you will choose investment ____; if you choose the profitability index criterion, you will choose investment ____. Based on your first four answers, which project will you finally choose? Group of answer choices A; A; A; A; A A; B; A; A; A B; A; A; A; A A; B; B; B; B B; B; B; B; B
