### Calculate the exact crossover point between project a and b

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Assignment- Capital Budgeting Part 1

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You are considering the following three projects. A &B are mutually exclusive while C is independent.

Following are their expected cash flows

 year project A Project B Project C 0 -60,000.00 -40,000.00 -20,000.00 1 0 40,000.00 35,000.00 2 82,000.00 40,000.00 30,000.00 3 60,000.00 20,000.00 2,000.00 4 20,000.00 10,000.00 -40,000.00

Assuming no capitol rationing a required rate of return (cost of capital) of 11% for all three projects.

1) Calculate NPV for each project.
2) Calculate IRR(s) for each project.
3) Calculate PI for each project.
4) Using cost of capital, as a financing and reinvestment rate, calculate MIRR for each project.
5) If A&B profiles cross, calculate the exact crossover point between project A & B.
6) Which of the three projects, if any, should be accepted and why?

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