Reference no: EM133348705

Capital Budgeting Project

In this exercise, you are a new capital-budgeting analyst for a company considering investments in the eight projects listed below. The chief financial officer (CFO) of your company has asked you to rank the projects and recommend the "four best" that the company should accept.

Only quantitative considerations are relevant. No other project characteristics are deciding factors in the selection, except that management has determined that projects 7 and 8 are mutually- exclusive.

Individually, you must analyze six independent projects and two mutually-exclusive projects with the cash flows listed below.

Each Project is analyzed on its own worksheet, see the labeling of the worksheets below. The only two projects that are analyzed together are Projects 7 and 8.

Please analyze the cash flows by calculating the following:

1. Payback Period - 1 point per project

2. Discounted Payback Period at 5%, 10%, and 15% - 3 points per project

3. Internal Rate of Return (IRR) - 3 points per project

4. NPV at 5%, 10%, 15%. - 9 points per project

5. Calculate the Profitability Index - PI at 5%, 10%, and 15%. - 9 points per project

6. Modified Internal Rate of Return (MIRR) at 5%, 10%, and 15% - 9 points per project

For Projects 7 and 8, calculate the above PLUS do the analysis below to help determine which one is the best project.

7. Calculate and Graph the NPV Profiles for Projects 7 and 8. - 4 points

8. Calculate the crossover rate for Projects 7 and 8. - 4 points

9. Which is better of the two projects, 7 or 8, and would 7 or 8 be ranked among the top four?

10. On the "Rankings and Explanations" worksheet, provide your top four projects and the capital budgeting results you used to substantiate this.

Attachment:- Capital Budgeting Project.rar