# Ehrmann Data Systems is considering a project that has the following cash flow - 14695

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 Problem 1: Complete the table, and tell me whether we accept or reject. Period Project A CF0 -100 CF1 50 CF2 40 CF3 40 CF4 15 RRR (Discount) 15% NPV IRR Problem 2: Complete the table, tell me which project you'd select, and why. Period Project A Project B CF0 -100 -100 CF1 50 70 CF2 70 75 CF3 40 10 RRR 10% 10% NPV IRR Problem 3: Find the MIRR Ehrmann Data Systems is considering a project that has the following cash flow and WACC data.  What is the project's MIRR? Do we accept or reject, and why? WACC:  10.00% Year 0 1 2 3 Cash flows (\$1,000) \$450 \$450 \$450 Problem 4: Nast Inc. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the higher MIRR rather than the one with the higher NPV, how much value will be forgone? WACC:  8.75% Year 0 1 2 3 4 CFS (\$1,100) \$375 \$375 \$375 \$375 CFL (\$2,200) \$725 \$725 \$725 \$725 Problem 5: Stern Associates is considering a project that has the following cash flow data. Calculate the NPV and MIRR if the RRR is 9%, and provide a recommendation on whether to accept or reject. Year 0 1 2 3 4 5 Cash flows (\$1,100) \$400 \$510 (\$320) \$530 \$340
Solution Description

Problem 1: Complete the table, and tell me whether we accept or reject.
Period Project A
CF0 -100
CF1 50 Accept the project
CF2 40
CF3 40
CF4 15
RRR (Discount) 15%   &n
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