You are a financial analyst for the Brittle Company. The director of capital budgeting has asked you to analyze two proposed capital investments:

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This submission should include all calculations for part (a), completed on the designated tab of the Homework Student Workbook, (5-2 question 1 tab) and a document explaining the implications of your findings for the business or business transaction.

You are a financial analyst for the Brittle Company. The director of capital budgeting has asked you to analyze two proposed capital investments: Projects X and Y. Each project has a cost of $10,000, and the cost of capital for each is 12%. The projects’ expected net cash flows are shown in the table below.

Expected Net Cash Flows

Year

Project X

Project Y

0

– $10,000

– $10,000

1

6,500

3,500

2

3,000

3,500

3

3,000

3,500

4

1,000

3,500

  1. a. Use the Homework Student Workbook to calculate each project’s net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), and profitability index (PI).
  2. b. Which project or projects should be accepted if they are independent?
  3. c. Which project or projects should be accepted if they are mutually exclusive?

For additional details, please refer to the Homework Guidelines and Rubric document.

 

FIN 550 Homework Guidelines and Rubric
This course uses homework problems to demonstrate competence and allow for practice with calculations unique to finance. Complete all your calculations in
the Homework Student Workbook. Then summarize your findings and discuss the implications of the findings for the business or potential business transaction.
Follow the instructions for each question in Modules Three and Five and complete the assigned work.
Guidelines for Submission: Each homework assignment must be submitted as a 1-page Microsoft Word document with double spacing, 12-point Times New
Roman font, and one-inch margins. Any sources should be cited according to APA style. In addition, your Homework Student Workbook must be submitted to
demonstrate all calculations.
Critical Elements Proficient (100%) Needs Improvement (70%) Not Evident (0%) Value
Accuracy of
Calculations
Includes detailed calculations, including
demonstration of each step taken to
accurately complete the problem
Includes calculations that are inaccurate
and/or does not include all of the steps
needed
Includes calculations that are inaccurate
and does not provide an explanation of
calculations
45
Analysis: Implications Includes an explanation of the
implications of the findings for the
business and/or potential business
transaction
Explains the implications of the findings,
but there are inaccuracies or explanation
is insufficient
Does not include an explanation of the
findings
45
Articulation of
Response
Submission has no major errors related to
citations, grammar, spelling, syntax, or
organization
Submission has major errors related to
citations, grammar, spelling, syntax, or
organization that negatively impact
readability and articulation of main ideas
Submission has critical errors related to
citations, grammar, spelling, syntax, or
organization that prevent understanding
of ideas
10
Earned Total 100%