Using a WACC of 15%, apply four capital budgeting techniques to evaluate the project
Question # 00668028
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Updated on: 04/04/2018 07:27 AM Due on: 04/04/2018
Using a WACC of 15%, apply four capital budgeting techniques to evaluate the project, assuming the Free Cash Flows are as follows:
Years Free Cash Flows
0 $ -252,000.00
1 $118,625.00
2 $127,125.00
3 $181,000.00
The four techniques are NPV, IRR, MIRR, and discounted Payback. Assume the reinvestment rate to be 8% for the MIRR. Also, assume that the business will only accept projects with a payback period of two and half years or less
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Solution: Using a WACC of 15%, apply four capital budgeting techniques to evaluate the project