Your firm is considering two equally riskyprojects, Alpha and Beta, with the incrementalcash flows listed in the table below. TheWACC is 12.00% .YearProject AlphaProject Beta-500,000-500,0001-10,000200,0002200,000-40,0003300,000300,000200,00040,0005150,000150,0006-100,00075,000A. What is the NPV of each project? Round tothe nearest dollar.B. What is the MIRR of the better project?Record your answer in percentage and to twodecimal places.

Capital budgeting decisions are the decisions required while investing in long-term investments.…

Your firm is considering two equally risky projects, Alpha and Beta, with the incremental cash flows listed in the table below. The WACC is 12.00% . Year Project Alpha Project Beta -500,000 -500,000 1 -10,000 200,000 2 200,000 -40,000 3 300,000 300,000 4 200,000 40,000 150,000 150,000 6 -100,000 75,000 A. What is the NPV of each project? Round to the nearest dollar. B. What is the MIRR of the better project? Record your answer in percentage and to two decimal places.

Your firm is considering two equally risky projects, Alpha and Beta, with the incremental cash flows listed in the table below. The WACC is 12.00% . Year Project Alpha Project Beta -500,000 -500,000 1 -10,000 200,000 2 200,000 -40,000 3 300,000 300,000 4 200,000 40,000 150,000 150,000 6 -100,000 75,000 A. What is the NPV of each project? Round to the nearest dollar. B. What is the MIRR of the better project? Record your answer in percentage and to two decimal places.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 18P

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