Identified two mutually exclusive projects, Finance Basics

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The director of capital budgeting for a firm has identified two mutually exclusive projects, A and B, with the following expected net cash flows:

Expected Net Cash Flows
Year Project A Project B
0 ($100) ($100)
1 70 10
2 50 60
3 20 80

Both of the projects have a cost of capital of 14 percent.

(i) What is the regular payback period (in years) for Project B?

Regular (non-discounted) Payback Period for B = ____________________.

(ii) What is Project A's net present value (NPV)?

NPV for A = ____________________.

(iii) What is the profitability index (PI) for Project B?

Profitability Index for B = ____________________.

(iv) What is the modified internal rate of return for Project A?

MIRR for Project A = ____________________.


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