Cummings Products Company is considering two mutually exclusive investments whos

Question

Cummings Products Company is considering two mutually exclusive investments whose expected net cash flows are as follows:

What is each project's MIRR at a cost of capital of 14%? (Hint: Note that B is a 6-year project.) Round your answers to two decimal places.

Project A  %

Project B  %

What is each project's MIRR at a cost of capital of 17%? (Hint: Note that B is a 6-year project.) Round your answer to two decimal places.

Project A  %

Project B  %

EXPECTED NET CASH FLOWS Year Project A Project B 0 -$290 -$400 1 -387 134 2 -193 134 3 -100 134 4 600 134 5 600 134 6 850 134 7 -180 134

Explanation / Answer

EXPECTED NET CASH FLOWS Year Project A Project B 0 -$290 -$400 1 -387 134 2 -193 134 3 -100 134 4 600 134 5 600 134 6 850 134 7 -180 134 What is each project's MIRR at a cost of capital of 14%? (Hint: Note that B is a 6-year project.) Round your answers to two decimal places. Project A % 16.28% MIRR using Excel =MIRR(payments A,14%,14%) Project B % 20.06% MIRR using Excel =MIRR(payments B,14%,14%) What is each project's MIRR at a cost of capital of 17%? (Hint: Note that B is a 6-year project.) Round your answer to two decimal places. Project A % 17.76% MIRR using Excel =MIRR(paymentsA,17%,17%) Project B % 21.65% MIRR using Excel =MIRR(payments B ,17%,17%)

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