Capital budgeting criteria A firm with a 13% WACC is evaluating two projects for

Question

Capital budgeting criteria

A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows:

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 places.
Project A      years
Project B      years

Calculate discounted payback for each project. Round your answers to two decimal places.
Project A      years
Project B      years

0 1 2 3 4 5

Explanation / Answer

Years A B PV @13% Project A Project B                              -              (21,000.00)    (63,000.00)                   1.00    (21,000.00)    (63,000.00)                         1.00                 7,000.00      19,600.00                   0.88        6,194.69      17,345.13                         2.00                 7,000.00      19,600.00                   0.78        5,482.03      15,349.67                         3.00                 7,000.00      19,600.00                   0.69        4,851.35      13,583.78                         4.00                 7,000.00      19,600.00                   0.61        4,293.23      12,021.05                         5.00                 7,000.00      19,600.00                   0.54        3,799.32      10,638.09 NPV        3,620.62        5,937.73

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