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  3. 3. assume you have two mutually exclusive projects

3. Assume you have two mutually exclusive projects, Project A and Project B, with the...

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Finance

3. Assume you have two mutually exclusive projects, Project A and Project B, with the cash flows indicated in the following table. Assume your WACC = 14%. Year Project A Project B 0 -500 -500 1 175 100 2 240 200 3 180 190 4 95 150 5 40 160 a. What is the Net Present Value (NPV) for Project A? b. What is the Net Present Value (NPV) for Project B? c. What is the Internal Rate of Return (IRR) for Project A? d. What it the Internal Rate of Return (IRR) for Project B? e. If you were capital constrained and had to pick either Project A or Project B (mutually exclusive projects), would you pick Project A, Project B or neither? WHY?? f. What is the Crossover Rate for Projects A & B? g. What is the NPV of Projects A & B at the Crossover Rate?

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