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    USE THE FOLLOWING DATA FOR THE NEXT EIGHT PROBLEMS:
    .
    The director of capital budgeting for Good Foods, 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 percent.
    .
    1. What is the payback period for Project S?
    .
    2. What is Project L's NPV?
    .
    3. What is Project L's IRR?
    .
    4. What is Project L's PI?
    .
    5. What is Project S's PI?
    .
    6. What is Project L's MIRR?

    7. What is Project S's MIRR?
    .
    8. What is the crossover point? (HINT: To find the precise crossover point, determine the cash flows for the Delta Project, which is the difference between the two projects' cash flows (e.g., Project L minus Project S), then calculate IRR of Delta Project.) An alternate way to derive an approximate crossover point is to plot the NPV profiles for the two projects?

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    https://brainmass.com/business/capital-budgeting/capital-budgeting-264478

    Solution Preview

    Please see the attachment. The calculations are in the excel file using excel functions.

    USE THE FOLLOWING DATA FOR THE NEXT EIGHT PROBLEMS:
    .
    The director of capital budgeting for Good Foods, 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 ...

    Solution Summary

    The solution explains how to calculate NPV, IRR, PI and MIRR

    $2.49

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