WACC = 8.0000% YEAR Expected Net Cash Flow Project X Project Y...

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Finance

WACC = 8.0000%

YEAR Expected Net Cash Flow

Project X Project Y

0 ($8,000) ($8,000)

1 3,500 6,000

2 3,500 3,250

3 3,500 3,000

4 3,500 1,500

Project X and Project Y Project X and Project Y PB (payback) Project X and Project Y DPB (Discounted Payback) Project X and Project Y NPV $ Project X and Project Y PI Project X and Project Y IRR% Project X and Project Y MIRR% Project X and Project Y EAA (NUS) $ CROSSOVER RATE % Project X and Project Y NPV $ (using crossover rate) If the projects are INDEPENDENT, which would you choose? WHY? _____________________________________________________________ If the projects are MUTUALLY EXCLUSIVE, which would you choose? WHY? _____________________________________________________________ When you would be INDIFFERENT between the projects? WHY? _____________________________________________________________

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