Need answers for 2 and 3 Tortellini Company hired you as their Financial Analyst. The Cap Bud directorknows that with your expertise, you will be able to provide a comprehensiveanalysis using the different methods. He presented two proposed capital projectsthat is Project Alpha and Project Omega. Every project costs P10,000. A 12% costof capital was proposed for each project. The following are the projected netcash flows for the project:Expected Net Cash FlowsProject Alpha(P10,000)Project Omega(P10,000)3.5003,500Year16,50023,00033,0003,50041,0003,500Required:1. Calculate the following using the information above:A. payback periodB. Net Present Value (NPV)C. Internal Rate of Return (IRR)D. Modified Internal Rate of Return (MIRR).2. Which of the following projects, if independent, should be accepted?3. Which of the following projects, mutually exclusive should be accepted?

Pay Back Period: Pay back period is the time frame in which the project is able to pay back the…

Answered: Need answers for 2 and 3

Business

Finance

Need answers for 2 and 3

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter11: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 2STP

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Question

Need answers for 2 and 3

Tortellini Company hired you as their Financial Analyst. The Cap Bud director
knows that with your expertise, you will be able to provide a comprehensive
analysis using the different methods. He presented two proposed capital projects
that is Project Alpha and Project Omega. Every project costs P10,000. A 12% cost
of capital was proposed for each project. The following are the projected net
cash flows for the project:
Expected Net Cash Flows
Project Alpha
(P10,000)
Project Omega
(P10,000)
3.500
3,500
Year
1
6,500
2
3,000
3
3,000
3,500
4
1,000
3,500
Required:
1. Calculate the following using the information above:
A. payback period
B. Net Present Value (NPV)
C. Internal Rate of Return (IRR)
D. Modified Internal Rate of Return (MIRR).
2. Which of the following projects, if independent, should be accepted?
3. Which of the following projects, mutually exclusive should be accepted?

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