Charlestown Inc. is considering Projects S and L, whose cashflows are shown below. These projects are mutually exclusive,equally risky, and not repeatable.
WACC: | 9.00% | | | | |
| 0 | 1 | 2 | 3 | 4 |
CFS | -$2,000 | $950 | $950 | $950 | $950 |
CFL | -$9,000 | $3,200 | $3,200 | $3,200 | $3,200 |
- If the decision is made by choosing the project with the higherIRR, how much value will be forgone?
- What is the payback period for Project S?
- What is the discounted payback period for Project L?
- What is the cross-over rate?
- What is MIRR for project S?
