| Problem 1: Complete the table, and tell me whether we accept or reject. | |||||||
| Period | Project A | ||||||
| CF0 | -100 | ||||||
| CF1 | 50 | ||||||
| CF2 | 40 | ||||||
| CF3 | 40 | ||||||
| CF4 | 15 | ||||||
| RRR (Discount) | 15% | ||||||
| NPV | |||||||
| IRR | |||||||
| Problem 2: Complete the table, tell me which project you'd select, and why. | |||||||
| Period | Project A | Project B | |||||
| CF0 | -100 | -100 | |||||
| CF1 | 50 | 70 | |||||
| CF2 | 70 | 75 | |||||
| CF3 | 40 | 10 | |||||
| RRR | 10% | 10% | |||||
| NPV | |||||||
| IRR | |||||||
| Problem 3: Find the MIRR | |||||||
| Ehrmann Data Systems is considering a project that has the following cash flow and WACC data. What is the project's MIRR? | |||||||
| Do we accept or reject, and why? | |||||||
| WACC: 10.00% | |||||||
| Year | 0 | 1 | 2 | 3 | |||
| Cash flows | ($1,000) | $450 | $450 | $450 | |||
| Problem 4: | |||||||
| Nast Inc. is considering Projects S and L, whose cash flows are shown below. | |||||||
| These projects are mutually exclusive, equally risky, and not repeatable. | |||||||
| If the decision is made by choosing the project with the higher MIRR rather than the one with the higher NPV, how much value will be forgone? | |||||||
| WACC: 8.75% | |||||||
| Year | 0 | 1 | 2 | 3 | 4 | ||
| CFS | ($1,100) | $375 | $375 | $375 | $375 | ||
| CFL | ($2,200) | $725 | $725 | $725 | $725 | ||
| Problem 5: | |||||||
| Stern Associates is considering a project that has the following cash flow data. | |||||||
| Calculate the NPV and MIRR if the RRR is 9%, and provide a recommendation on whether to accept or reject. | |||||||
| Year | 0 | 1 | 2 | 3 | 4 | 5 | |
| Cash flows | ($1,100) | $400 | $510 | ($320) | $530 | $340 | |
CLICK HERE TO GET THE ANSWER !!!!
No comments:
Post a Comment