Question

Capital budgeting criteria A firm with a 13% WACC is evaluating two projects for this year's capital budget depreciation, are as follows: 0 2 3 4 Project A $30,000 $10,000 $10,000 $10,000 $10,000 $10,000 Project B $90,000 $28,000 $28,000 $28,000 $28,000 $28,000 a. Calculate NPV for each project. Round your answers to the nearest cent. Project A $ Project B $ Calculate IRR for each project. Round your answers to two decimal places. Project A Project B Calculate MIRR for each project. Round your answers to two decimal places. Project A Project B Calculate payback for each project. Round your answers to two decimal place Project A Project B Calculate discounted payback for each project. Round your answers to two d Project A Project B years years years years

Answer 1

We shall use excel and other methods to calculate these:

Year	Project A	Project B	DF	PV A	PV B	Cumulative A	cumulative B	Cumulative dis A	Cumulative dis B
0	$ (30,000.00)	$ (90,000.00)	1	$ (30,000.00)	$ (90,000.00)	$ (30,000.00)	$ (90,000.00)	$ (30,000.00)	$ (90,000.00)
1	$   10,000.00	$   28,000.00	0.884956	$      8,849.56	$   24,778.76	$ (20,000.00)	$ (62,000.00)	$ (21,150.44)	$ (65,221.24)
2	$   10,000.00	$   28,000.00	0.783147	$      7,831.47	$   21,928.11	$ (10,000.00)	$ (34,000.00)	$ (13,318.98)	$ (43,293.13)
3	$   10,000.00	$   28,000.00	0.69305	$      6,930.50	$   19,405.40	$                   -	$   (6,000.00)	$   (6,388.47)	$ (23,887.73)
4	$   10,000.00	$   28,000.00	0.613319	$      6,133.19	$   17,172.92	$   10,000.00	$   22,000.00	$       (255.29)	$   (6,714.80)
5	$   10,000.00	$   28,000.00	0.54276	$      5,427.60	$   15,197.28	$   20,000.00	$   50,000.00	$      5,172.31	$      8,482.48
NPV	$      5,172.31	$      8,482.48		$      5,172.31	$      8,482.48
IRR	19.86%	16.80%
MIRR	16.65%	15.05%
Payback A	3.00 years
Payback B	3.21 years
Discounted A	4.05 years
Discounted B	4.44 years

Book1 - Excel Imran Khan File Home Insert Page Layout Formulas Revie View Add-ins HelpTell me what you want to do Share Comments Cut Σ AutoSum . A Percentage Copy Paste Conditional Format as Cell Formatting Table Styles nsert Delete Format Sort & Find & Filter-Select" Format Painter Clear- Clipboard Alignment Number Cells Editing SUM ear Project AProject B DF PV A PV B Cumulative A cumulative B Cumulative d Cumulative dis B 1 $(30,000.00) $(90,000.00) $(30,000.00)$(90,000.00)$(30,000.00)$(90,000.00) 1 10,000.00 28,000.00 0.884956 $ 8,849.56$ 24,778.76 $(20,000.00) $(62,000.00) $(21,150.44) $(65,221.24) 2 10,000.00 28,000.00 0.783147 $ 7,831.47$21,928.11 $(10,000.00) $(34,000.00) $(13,318.98) $(43,293.13) $(6,000.00) $ (6,388.47) $(23,887.73) $10,000.00|$ 28,000.00 0.613319 $ б,133.19 $ 17,172.92 $10,000.00 $ 22,000.00 $ (25529) $(6,714.80) 5 10,000.00 $28,000.00 0.54276 5,427.60 $15,197.28 20,000.00 50,000.00 S 5,172.31 $ 8,482.48 $(30,000.00)$(90,000.00) 3 10,000.00 28,000.00 0.693056,930.50 $19,405.40$ 12 13 5,172.31 IRRI 9:H14 8,482.48 $ 5,172.31 8,482.48 NPV IRR MIRR 16.30% 15.05% 17 16.65% Payback A Payback B 3.00 3.21 20 21 23 24 25 4.05 4.44 Discounte Screenshot saved The screenshot was added to your OneDrive. Discounte Sheet1Sheet2 Sheet3 S:25 AM O Type here to search