Suppose you are the financial manager of a firm considering the following five projects. Project A...
Suppose you are the financial manager of a firm considering the following five projects.
| Project A | Project B | Project C | Project D | Project E | |
| Initial Investment | -$10,000 | -$15,000 | -$14,000 | -$6,000 | -$1,500 |
| Year 1 | $5,000 | $5,000 | $6,000 | $4,000 | $1,000 |
| Year 2 | $4,000 | $5,000 | $4,000 | $2,000 | $250 |
| Year 3 | $2,000 | $5,000 | $3,500 | $2,000 | $100 |
| Year 4 | $1,000 | $5,000 | $2,500 | $2,000 | $100 |
| Year 5 | $5,000 | $2,000 | $100 | ||
| Year 6 | $2,000 | $100 |
- Calculate the Payback Period for each project.
- Calculate the NPV for each project, assuming a discount rate of 11%.
- Calculate the IRR for each project.
- Which projects should the firm implement based on your analysis If the projects are mutually exclusive? What if they are independent? Write an email to your CFO explaining your rationale proving the choices based on the considerations of shareholder value. Assume there is no capital constraint and any desired projects can be funded.
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Suppose you are the financial manager of a firm considering the
following five projects.
Project A...
Option #1: Capital Rationing Table with Cash Flows for 5 projects. Project A Project B Project...
Option #1: Capital Rationing Table with Cash Flows for 5 projects. Project A Project B Project C Project D Project E Initial Investment -$100,000 -$25,000 -$40,000 -$10,000 -$150,000 Year 1 $50,000 $15,000 $20,000 $7,000 $100,000 Year 2 $40,000 $10,000 $15,000 $4,000 $25,000 Year 3 $20,000 $5,000 $5,000 $2,000 $10,000 Year 4 $10,000 $1,000 $5,000 $1,000 $10,000 Year 5 $1,000 $10,000 Year 6 $1,000 $10,000 Calculate the IRR for each of the projects presented. Rank the projects based on their IRR....
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows:...
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: 0 1 2 3 4 Project X -$1,000 $100 $300 $370 $650 Project Y -$1,000 $1,000 $100 $50 $45 The projects are equally risky, and their WACC is 12%. What is the MIRR of the project that maximizes shareholder value? Do not round intermediate calculations. Round your answer to two decimal places. =___%
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: = Project X Project...
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: = Project X Project Y -$1,000 $110 -$1,000 $1,100 $280 $110 $400 $55 $750 $50 The projects are equally risky, and their WACC is 8%. What is the MIRR of the project that maximizes shareholder value? Round your answer to two decimal places. Do not round your intermediate calculations. %
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash...
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: 0 1 2 3 4 Project X -$1,000 $100 $300 $400 $650 Project Y -$1,000 $900 $100 $55 $50 The projects are equally risky, and their WACC is 12%. What is the MIRR of the project that maximizes shareholder value? Round your answer to two decimal places. Do not round your intermediate calculations. ? %
A firm is considering two mutually exclusive projects, X and Y with the following cash flows:...
A firm is considering two mutually exclusive projects, X and Y with the following cash flows: 2 3 Project X Project Y - $1,000 -$1,000 $100 $900 $320 $90 $430 $50 $650 $45 The projects are equally risky, and their WACC is 13%. What is the MIRR of the project that maximizes shareholder value? Round your answer to two decimal places. Do not round your intermediate calculations
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows:...
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: 0 1 3 4 $1,000 $300 Project X $100 $370 $700 Project Y -$1,000 $100 $1,100 $50 $45 The projects are equally risky, and their WACC is 12%. What is the MIRR of the project that maximizes shareholder value? Do not round intermediate calculations. Round your answer to two decimal places.
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash...
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: 0 1 2 3 4 Project X $(1,000) $100 $320 $370 $750 Project Y $(1,000) $1,000 $110 $50 $55 The projects are equally risky, and their WACC is 13%. What is the MIRR of the project that maximizes shareholder value? Round your answer to two decimal places. Do not round your intermediate calculations. %
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash...
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: 0 1 2 3 4 Project X -$1,000 $110 $300 $370 $750 Project Y -$1,000 $1,100 $100 $45 $55 The projects are equally risky, and their WACC is 11%. What is the MIRR of the project that maximizes shareholder value? Round your answer to two decimal places. Do not round your intermediate calculations. ___%
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows:...
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows:Project X -$1,000 $110 $320 $430 $650 Project Y -$1,000 $900 $110 $45 $55 The projects are equally risky, and their WACC is 9%. What is the MIRR of the project that maximizes shareholder value? Do not round intermediate calculations. Round your answer to two decimal places.
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash...
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: 0 2 3 4 Project X$1,000 $90 $320 $370 $750 Project Y $1,000 $1,100 $110 $50 $45 The projects are equally riskyNnd their WACC is 13.0%, what is the MIRR of the project that maximizes shareholder value? Round your answer to two decimal places.
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: = Project X Project Y -$1,000 $110 -$1,000 $1,100 $280 $110 $400 $55 $750 $50 The projects are equally risky, and their WACC is 8%. What is the MIRR of the project that maximizes shareholder value? Round your answer to two decimal places. Do not round your intermediate calculations. %
A firm is considering two mutually exclusive projects, X and Y with the following cash flows: 2 3 Project X Project Y - $1,000 -$1,000 $100 $900 $320 $90 $430 $50 $650 $45 The projects are equally risky, and their WACC is 13%. What is the MIRR of the project that maximizes shareholder value? Round your answer to two decimal places. Do not round your intermediate calculations
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: 0 1 3 4 $1,000 $300 Project X $100 $370 $700 Project Y -$1,000 $100 $1,100 $50 $45 The projects are equally risky, and their WACC is 12%. What is the MIRR of the project that maximizes shareholder value? Do not round intermediate calculations. Round your answer to two decimal places.
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows:Project X -$1,000 $110 $320 $430 $650 Project Y -$1,000 $900 $110 $45 $55 The projects are equally risky, and their WACC is 9%. What is the MIRR of the project that maximizes shareholder value? Do not round intermediate calculations. Round your answer to two decimal places.
MIRR A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: 0 2 3 4 Project X$1,000 $90 $320 $370 $750 Project Y $1,000 $1,100 $110 $50 $45 The projects are equally riskyNnd their WACC is 13.0%, what is the MIRR of the project that maximizes shareholder value? Round your answer to two decimal places.
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