o thi apital 1 O CRITERIA % Y upial gl RN A g R o » nchuing depreciaion, e a5 o o 3 4 200 00 g0 s $5600 g5ann $5600 $5600 85600 4 discounte payback for each projct €, which onets wouid you recommend? 5, Which wonld you rocommend et s ik o . Why s thers o confic between NPV and 1y ing pat Lol
Extracted text: this year's capital budget. After-tax cash flows, including depreciation, wte TING CRITERIA A firm with a 14% WACC is evaluating two projects for are as follows: 2 + $2,000 $5,600 Calculate NPV, IRR, MIRR, payback, and discounted payback for each project b. Assuming the projects are independent, which one(s) would you recommend? 3 Project A Project B -$6,000 -$18,000 $2,000 $5,600 $2,000 $5,600 $2,000 $5,600 $2,000 $5,600 a. If the projects are mutually exclusive, which would you recommend? C. d. Notice that the projects have the same cash flow timing pattern. Why is there a coniet between NPV and IRR? 11.8 CAPITA I DI -