Cater company must choose between two mutually exclusive manufacturing projects, and each cost $10 million. Its WACC is 12%, and the net cash flows would be as follows: Project Cash flow 1 6 millions 3 million Cash flow 2 Cash flow 3 Cash flow 4 3 million -1 million 3.5 million 2 millions 1.5 million M 3.5 million Required: 1. Calculate each project's payback period, net present value (NPV), internal rate of return (IRR), and modified internal rate of return (MIRR)? 2. Which project or projects should be accepted if they are independent? 3. Which project would be selected as view of NPV and IRR, if they are mutually exclusive projects? wwww

Cater company must choose between two mutually exclusive manufacturing projects, and each cost $10 million. Its WACC is 12%, and the net cash flows would be as follows: Project Cash flow 1 6 millions 3 million Cash flow 2 Cash flow 3 Cash flow 4 3 million -1 million 3.5 million 2 millions 1.5 million M 3.5 million Required: 1. Calculate each project's payback period, net present value (NPV), internal rate of return (IRR), and modified internal rate of return (MIRR)? 2. Which project or projects should be accepted if they are independent? 3. Which project would be selected as view of NPV and IRR, if they are mutually exclusive projects? wwww

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...

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