12-3: Net Present Value (NPV) 12-5: Modified Internal Rate of Return (MIRR) 12-7: Payback Period Problem 12-21 Payback, NPV, and MIRR Your division is considering two investment projects, each of which requires an up-front expenditure of $22 millon. You estimate that the cost of capital is 9% and that the investments will produce the following after-tax cash flows (in millions of dollars): Year Project A Project B 1 2 10 10 a. What is the regular payback period for each of the projects 7 Round your answers to two decimal places. Project A years Projecte 3 years b. What is the discounted payback period for each of the projects? Round your answers to two decimal places Project A years Project B y ears C. If the two projects are independent and the cost of capital is 9%, which project or projects should the firm undertake? Both projects d. If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake? Project A g 2. If the two projects are mutually exclusive and the cost of capital is 155, which project should the firm undertake? Project f. What is the crossover rate? Round your answer to two decimal places. 9. If the cost of capital is 9%, what is the modified IRR (MIRR) of each project? Round your answers to two decimal places. Project A 4 Projecte