11.1 11.1-11.

6 1 2
-52125 12000 12000
WACC 12%
NPV $7,486.68
IRR 16%
IRR 15.9989
NPV(16%) ($1.91) ($0.06)
MIRR 14%

DISCOUNT
PAYBACK -52125 ($10,714.29) ($9,566.33)
($41,410.71) ($31,844.38)
DISCOUNT
PAYBACK 1 1

11.7 WACC
0 1
PROJECT A -6000 2000
project B -18000 5600
A B
NPV $866.16 $1,225.25
IRR 19.86% 16.80%
MIRR 17% 15.51%
0 1

project A -6000 2000

-4000
Project B -18000 5600
-12400
PAYBACK period project A 3
Project B 3.2142857143

Dicount Payback period 1

Porject A ($1,754.39)
$4.17 -6000 ($4,245.61)
Discounted pay
>paybacak Project B ($4,912.28)
$4.58 -18000 ($13,087.72)

q11-6 0 1 2
Project A -25 5 10
Project B -20 10 9
DIFFERNCE -5 -5 1
NPV
WACC Project A Project B
0.05 $ 3.52 2.870100421121 A
0.1 $ 0.58 $1.04 B
0.15 $ (1.91) $ (0.55) NO ONE (WACC> IRR)

CROSS OVER
POINT 7.81%
IRR Irr depends upon cashflows just so isnot effected b
Project A Project B
11.10% 13.18%
11.10% 13.18%
11% 13%
 3 4 5 6 7 8
12000 12000 12000 12000 12000 12000

($8,541.36) ($7,626.22) ($6,809.12) ($6,079.57) ($5,428.19) ($4,846.60)

($23,303.02) ($15,676.80) ($8,867.68) ($2,788.11)

1 1 1 1 0.5136348455 6.5136348455

0.14
2 3 4 5
2000 2000 2000 2000
5600 5600 5600 5600

Independent =Accpet both a and b since IRR> WACC

Mutullay exclusive= ACCEPT A since IRR is greater)
2 34 5

2000 2000 2000 2000

-2000 0
5600 5600 5600 5600
-6800 -1200 -0.2142857143

Accept project A, since its pay back period is less

2 3 4 5
($1,538.94) ($1,349.94) ($1,184.16) ($1,038.74)
($2,706.68) ($1,356.74) ($172.58) $866.16

($4,309.02) ($3,779.84) ($3,315.65) ($2,908.46) Accept project A&B, since indepenent , payback is less than time
($8,778.70) ($4,998.86) ($1,683.21) $0.58 Accept project A, since its pay back period is less

3
17 WACC 0.05 0.10 0.15
6
11
 SELECT PROJECT B, SINCE ITS NPV >

ONE (WACC> IRR) Select no project is NPV <0

ws just so isnot effected by WACC

penent , payback is less than time period
y back period is less