Calculate the payback period and discounted payback

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Problem - You are considering two projects, A and B. Each project will cost $200,000, the WACC is 8.5%, and the projected cash flows are as follows:

Year

Project A

Project B

1

$ 12,580

$90,562

2

37,733

67,920

3

70,437

50,312

4

88,050

36,735

5

100,625

25,156

Required -

a. Calculate the payback period, discounted payback, NPV, PI, IRR, and MIRR. If A and B are mutually exclusive, which should be selected?

b. Create an NPV profile chart for projects A and B. What is the exact crossover rate for these two projects?

Reference no: EM132712237

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