1. NPV and IRR Analysis Cummings Products-is considering two mutually exclusive investments
whose expected net cash flows are as follows: 3. Select the cortect graph for NPV profiles for
Projects A and B.
The correct graph is b. What is each prolect's tRR? Do not round intecmediate calculations,
Round your answers to tho decimal places. Prolect A i) Project Bt c. Colculate tha two projects:
Nprs. if each project's cost of capital were 11%b, Do not round intermediate calculations. Round
your answers to the nearest cent. Project Ais Project i & Which project, if ether, sheuld be
salected? shevid be telected Calculate the twa projects' NPVis. if esch project's cont of capital
were 10 wo, Do not round incermediate cacuiatiors. Round your answers to the neareat ceat.
Profect A: 4 Project A:4 What would be the proper cholite? is the progerichoice.
is the proper choice. 1. What is each project's MIRR at a cost of capital of 11% ? (Hint: Consider
Period 7 as the end of Project B's life.) Do not round intermediate calculations. answers to two
decimal places. ProjectA:ProjectB:%% What is each project's MtRR at a cost of capital of 18% ?
(Hint: Consider Period 7 as the end of Project B's life.) Do not round intermediate caiculations. R
answers to two decimal places. Project A: Project B: e. What is the crossover rate? Do not round
intermediate calculations. Round your answer to two decimal places. What is its significance? 1.
If the cost of capital is greater than the crossover rate, both the NPV and IRR methods will lead
to the same project selection. II. If the cost of capital is less than the croasover rate, both the
NPV and IRR methods lead to the same project seiections. III. The crossover rate has no
significante in capital budgeting analysis.