c. What is each project's IRR? (Hint: Using the Excel IRR function, set the guess parameter to be 10%.) Round your answers to two decimal places. IRR (Project A): 18.10 % IRR (Project B): 23.25 % d. What is the crossover rate, and what is its significance? (Hint: Using the Excel IRR function, set the guess parameter to be 10%.) Round your answer for the crossover rate to two decimal places and for the NPV to the nearest cent. The crossover rate is 11.998 %. The crossover rate represents the cost of capital at which the two projects have the NPV of $ e. What is each project's MIRR at a cost of capital of 8%? At r = 17%? Round your answers to two decimal places. MIRR at r = 8% MIRR at r = 17% Project A 12.89 17.56 Project B % 15.24 % % 19.89 % f. What is the regular payback period for these two projects? Round your answers to two decimal places. Regular payback period (Project A): 5.55 years Regular payback period (Project B): 4.31 years g. At a cost of capital of 8%, what is the discounted payback period for these two projects? Round your answers to two decimal places. Discounted payback period (Project A): 5.98 years Discounted payback period (Project B): 3.01 years h. What is the profitability index for each project if the cost of capital is 8%? Round your answers to three decimal places. Profitability index (Project A): 1.075 ☑ Profitability index (Project B): .575 X Start with the partial model in the file Ch12 P25 Build a Model.xlsx. Gardial Fisheries is considering two mutually exclusive investments. The projects' expected net cash flows are as follows: Expected Net Cash Flows Year Project A Project B 0 -$395 -$595 1 -360 180 2 -240 180 3 -120 180 4 720 180 5 720 180 6 7 912 -240 180 180 The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Download spreadsheet Ch12 P25 Build a Model-bd95d6.xlsx a. If each project's cost of capital is 8%, which project should be selected? Round your answers to the nearest cent. NPV (Project A): $ NPV (Project B): $ 424.56 342.15 Project A should be selected. If the cost of capital is 17%, what project is the proper choice? Round your answers to the nearest cent. NPV (Project A): $ 35.25 NPV (Project B): $ Project B 111.03 should be selected.

Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows
Section: Chapter Questions
Problem 23SP: Start with the partial model in the file Ch10 P23 Build a Model.xlsx on the textbooks Web site....
icon
Related questions
Question
what should i put for the blank my cursor is on and can i get feedback on the red x’s
c. What is each project's IRR? (Hint: Using the Excel IRR function, set the guess parameter to be 10%.) Round your answers to two decimal places.
IRR (Project A):
18.10
%
IRR (Project B):
23.25
%
d. What is the crossover rate, and what is its significance? (Hint: Using the Excel IRR function, set the guess parameter to be 10%.) Round your answer for the crossover rate to two decimal places and
for the NPV to the nearest cent.
The crossover rate is
11.998
%. The crossover rate represents the cost of capital at which the two projects have the NPV of $
e. What is each project's MIRR at a cost of capital of 8%? At r = 17%? Round your answers to two decimal places.
MIRR at r = 8%
MIRR at r = 17%
Project A
12.89
17.56
Project B
%
15.24 %
%
19.89
%
f. What is the regular payback period for these two projects? Round your answers to two decimal places.
Regular payback period (Project A):
5.55
years
Regular payback period (Project B):
4.31
years
g. At a cost of capital of 8%, what is the discounted payback period for these two projects? Round your answers to two decimal places.
Discounted payback period (Project A):
5.98 years
Discounted payback period (Project B):
3.01
years
h. What is the profitability index for each project if the cost of capital is 8%? Round your answers to three decimal places.
Profitability index (Project A):
1.075 ☑
Profitability index (Project B):
.575 X
Transcribed Image Text:c. What is each project's IRR? (Hint: Using the Excel IRR function, set the guess parameter to be 10%.) Round your answers to two decimal places. IRR (Project A): 18.10 % IRR (Project B): 23.25 % d. What is the crossover rate, and what is its significance? (Hint: Using the Excel IRR function, set the guess parameter to be 10%.) Round your answer for the crossover rate to two decimal places and for the NPV to the nearest cent. The crossover rate is 11.998 %. The crossover rate represents the cost of capital at which the two projects have the NPV of $ e. What is each project's MIRR at a cost of capital of 8%? At r = 17%? Round your answers to two decimal places. MIRR at r = 8% MIRR at r = 17% Project A 12.89 17.56 Project B % 15.24 % % 19.89 % f. What is the regular payback period for these two projects? Round your answers to two decimal places. Regular payback period (Project A): 5.55 years Regular payback period (Project B): 4.31 years g. At a cost of capital of 8%, what is the discounted payback period for these two projects? Round your answers to two decimal places. Discounted payback period (Project A): 5.98 years Discounted payback period (Project B): 3.01 years h. What is the profitability index for each project if the cost of capital is 8%? Round your answers to three decimal places. Profitability index (Project A): 1.075 ☑ Profitability index (Project B): .575 X
Start with the partial model in the file Ch12 P25 Build a Model.xlsx. Gardial Fisheries is considering two mutually exclusive investments. The projects' expected net cash flows are as follows:
Expected Net Cash Flows
Year
Project A
Project B
0
-$395
-$595
1
-360
180
2
-240
180
3
-120
180
4
720
180
5
720
180
6
7
912
-240
180
180
The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations.
Download spreadsheet Ch12 P25 Build a Model-bd95d6.xlsx
a. If each project's cost of capital is 8%, which project should be selected? Round your answers to the nearest cent.
NPV (Project A): $
NPV (Project B): $
424.56
342.15
Project A
should be selected.
If the cost of capital is 17%, what project is the proper choice? Round your answers to the nearest cent.
NPV (Project A): $
35.25
NPV (Project B): $
Project B
111.03
should be selected.
Transcribed Image Text:Start with the partial model in the file Ch12 P25 Build a Model.xlsx. Gardial Fisheries is considering two mutually exclusive investments. The projects' expected net cash flows are as follows: Expected Net Cash Flows Year Project A Project B 0 -$395 -$595 1 -360 180 2 -240 180 3 -120 180 4 720 180 5 720 180 6 7 912 -240 180 180 The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Download spreadsheet Ch12 P25 Build a Model-bd95d6.xlsx a. If each project's cost of capital is 8%, which project should be selected? Round your answers to the nearest cent. NPV (Project A): $ NPV (Project B): $ 424.56 342.15 Project A should be selected. If the cost of capital is 17%, what project is the proper choice? Round your answers to the nearest cent. NPV (Project A): $ 35.25 NPV (Project B): $ Project B 111.03 should be selected.
Expert Solution
steps

Step by step

Solved in 2 steps with 7 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Corporate Fin Focused Approach
Corporate Fin Focused Approach
Finance
ISBN:
9781285660516
Author:
EHRHARDT
Publisher:
Cengage
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT