Your division is considering two investment projects, each of which requires an

Question

Your division is considering two investment projects, each of which requires an upfront expenditure of $28 million. You estimate that the cost of capital is 10% and that the investments will produce the following after-tax cash flows ( in millions of dollars ).
Year Project A project B
1 5 20
2 10 10
3 15 8
4 20 6
What is the regular payback period for each of the projects?

What is the discounted payback period for each of the projects? Round your answers tot wo decimal points.

If the two projects are independent and the cost is 11%, 5%, and 15%, which project or projects shoudl teh firm undertake?

What is the crossover rate? Round your answers to two decimal points.

If the cost of capital is 11%, what is the MIRR of each project? ound your answers to two decimal places.

Explanation / Answer

POINTS ARE LESS

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