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1) Considering the four projects that we discussed and last session's calculations for WACC1, WACC2...

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1) Considering the four projects that we discussed and last session's calculations for WACC1, WACC2 and Retained earnings breakpoint, what is the firm's optimal capital budget? Project A has a cost of $750,000 and an IRR of 11.63% Project B has a cost of $1,200,000 and an IRR of 13.03% Project C has a cost of $800,000 and an IRR of 12.43% Project D has a cost of $300,000 and an IRR of 11.61% 2) Given the following information about two mutually exclusive projects, calculate each project's IRR and NPV and provide your acceptance/rejection decision (assuming a WACC of 10%). Time 0 X -1 Y -100 1 1 .80 160 3) Calculate the MIRR for the following project cash flows (assuming a WACC of 12%) CFO = -500 CF1 = 300 CF2 = 400 CF3 = -100 CF4 = 50 CF5 = 250 CF6 = -30 1) WA CC, = Word (1-1) + Wp rp + Wers = 11.6% WACC2 = 0.3 (10%) (0.75 +0.1 (9%) + 0.6 (15.40) WACC 2= 2.3 % +0.9 % + 9.2%. = 12.4 2) REB= 2,000,000.15% = 2,500,000 60%

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