- Capital Budgeting
The director of capital budgeting for Giants Inc. has identified two mutually exclusive projects. Calculate payback period, NPV, IRR and MIRR.
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The director of capital budgeting for Giants Inc. has identified two mutually exclusive projects, L and S, with the following expected net cash flows:
Expected Net Cash Flows
Year Project L Project S
0 ($100) ($100)
1 10 70
2 60 50
3 80 20
Both projects have a cost of capital of 10%.
-What is the payback period for Project S?
-What is Project L's Net Present Value (NPV)?
-What is Project L's Internal Rate of Return (IRR)?
-What is Project L's Modified Internal Rate of Return (MIRR)?
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