Q2) A firm has a WACC of 9.32% and is deciding between two mutually exclusive projects....

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Q2) A firm has a WACC of 9.32% and is deciding between twomutually exclusive projects. Project A has an initial investment of$62.78. The additional cash flows for project A are: year 1 =$17.67, year 2 = $36.32, year 3 = $48.38. Project B has an initialinvestment of $72.71. The cash flows for project B are: year 1 =$51.70, year 2 = $39.41, year 3 = $22.75. Calculate the Following:a) Payback Period for Project A: (2 points) b) Payback Period forProject B: (2 points) c) NPV for Project A: (2 points) d) NPV forProject B: (2 points)

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aPayback period Full years until recovery unrecovered cost at the start of the yearcash flow during the year Payback method 2 years 879 4838 2 years 018 218 years bPayback period 1 year 2101 3941 1 year 053 153 years cNet present value is solved using a financial calculator The See Answer

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Q2) A firm has a WACC of 9.32% and is deciding between twomutually exclusive projects. Project A has an initial investment of$62.78. The additional cash flows for project A are: year 1 =$17.67, year 2 = $36.32, year 3 = $48.38. Project B has an initialinvestment of $72.71. The cash flows for project B are: year 1 =$51.70, year 2 = $39.41, year 3 = $22.75. Calculate the Following:a) Payback Period for Project A: (2 points) b) Payback Period forProject B: (2 points) c) NPV for Project A: (2 points) d) NPV forProject B: (2 points)