Problem Two If the cost of capital is 15%, which project should be chosen? If the...

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Finance

Problem Two
If the cost of capital is 15%, which project should be chosen?If the cost of capital is 25% which project should be chosen?
Construct the NPV profiles for Project A and Project B. (Note:plot the NPVs of both projects on the same graph.) The cost ofcapital ranges from 0% to 30% by increments of 2%.
Expected Cash Flows
Expected Cash Flows
Year
Project A
Project B
0
-24,000
-11,500
1
-17,000
4,500
2
1,500
5,000
3
10,500
6,500
4
20,500
8,000
5
25,000
9,000
6
28,000
9,500
7
30,000
10,000
Calculate each project’s IRR and the crossover rate of the twoprojects.
Calculate each project’s MIRR at a cost of capital of 10%.
Calculate each project’s regular payback period.
Calculate each project’s discounted payback period with a costof capital of 10%.
Calculate each project’s profitability index at a cost ofcapital of 10%.
Please answer question using excel functions with in cellviewing.

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Problem Two If the cost of capital is 15%, which project should be chosen?If the cost of capital is 25% which project should be chosen?Construct the NPV profiles for Project A and Project B. (Note:plot the NPVs of both projects on the same graph.) The cost ofcapital ranges from 0% to 30% by increments of 2%.Expected Cash FlowsExpected Cash FlowsYearProject AProject B0-24,000-11,5001-17,0004,50021,5005,000310,5006,500420,5008,000525,0009,000628,0009,500730,00010,000Calculate each project’s IRR and the crossover rate of the twoprojects.Calculate each project’s MIRR at a cost of capital of 10%.Calculate each project’s regular payback period.Calculate each project’s discounted payback period with a costof capital of 10%.Calculate each project’s profitability index at a cost ofcapital of 10%.Please answer question using excel functions with in cellviewing.

	Expected Cash Flows	Expected Cash Flows
Year	Project A	Project B
0	-24,000	-11,500
1	-17,000	4,500
2	1,500	5,000
3	10,500	6,500
4	20,500	8,000
5	25,000	9,000
6	28,000	9,500
7	30,000	10,000