Question

Consider the following two mutually exclusive projects: Year Cash Flow (X) -$20,800 9,050 9,500 9,000 Cash Flow (Y) 220,800 10,500 8,000 8,900 WN- Calculate the IRR for each project. (Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) IRR Project X Project Y What is the crossover rate for these two projects? (Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Crossover rate 1% What is the NPV of Projects X and Y at discount rates of 0%, 15%, and 25%? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project X Project Y Discount rate 0% 15% 25%

Answer 1

A B C D E 1 Cash flow year o 1 -20800 9050 9500 9000 1 Y -20800 10500 8000 8900 Difference 0 -1450 1500 8 2 100 9 10 11 15.49% 15.69% IRR Cross over rate 9.73% 16 17 Discount rate 0% 15% 25% Cash flow X Y 6750.00 6600.00 170.58 | 231.48 -2872.00 -2723.20 18 19

G11 B Ε ou WNA Cash flow year 7 -20800 9050 9500 9000 Difference =C6-D6 =C7-D7 =C8-08 =C9-09 -20800 10500 8000 8900 2 9 10 11 12 =IRR(C6:09) =IRR(D6:09) IRR Cross over rate =IRR(E6:E9) Cash flow 16 Discount rate o 17 0.15 0.25 =NPV($B17, C$7:0$9)+C$6 =NPV($B17,D$7:D$9)+D$6 =NPV($B18,C$7:C$9)+C$6 =NPV($B18,D$7:0$9)+D$6 =NPV($B19,C$7:0$9)+C$6 =NPV($B19,D$7:0$9)+D$6