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[answered] A firm has a WACC of 9% and is deciding between two mutuall


ATTACHED ARE ONLY 2 QUESTION RELATED TO WACC AND NPV. please see attached


A firm has a WACC of 9% and is deciding between two mutually exclusive projects. Project A has an initial

 

investment of $63. The additional cash flows for project A are: year 1 = $17, year 2 = $39, year 3 = $43. Project

 

B has an initial investment of $74.The cash flows for project B are: year 1 = $59, year 2 = $35, year 3 = $30.

 

Calculate the payback and NPV for each project. (Show all answers to 2 decimals. Round your answer to the

 

nearest 2 decimal places. DO NOT round until after all calculations have been completed and you have

 

reached your final answer. If your answer ends in a zero, only include 1 decimal place and omit the zero. If the

 

answer ends in two zeros after rounding, do not use any decimal places as software does not recognize the

 

".00" endings and will remove points from your score.)

 

Payback for A = ________

 

Payback for B = __________

 

NPV for A = ___________

 

NPV for B = _____________

 

2.

 

Project Z has an initial investment of $51,000. The project is expected to have cash inflows of $27,000 at the

 

end of each year for the next 15 years. The corporation has a WACC of 9%. Calculate the NPV for project Z.

 

NPV (nearest dollar) = ______________

 


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