Considering two mutually exclusing investments

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Reference no: EM132002296

Dalton Products is considering two mutually exclusing investments whose expected net cash flows are as follows:

Expected Net Cash Flows

Year Project A Project B

0 -$500 -$700

1 -565 220

2 -200 220

3 -140 220

4 1,200 220

5 830 220

6 950 220

7 -330 220

a. Construct NPV profiles for Projects A and B

b. What is each project's IRR?

c. If each project's cost of capital were 10%, which project, if either, should be selected?

d. What is each project's MIRR at the cost of capital of 10%? At 18%?

Reference no: EM132002296

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