SPREADSHEET PROBLEM (10-23) Build a Model: Capital Budgeting Tools Start with the partial model in the file Ch10 P23 Build a Model.xls on the textbooks Web site.Gardial Fisheries is considering two mutually exclusive investments. The projects expected net cash flows are as follows: Expected Net Cash Flows Year Project A Project B 0 -$375 ?$575 1 ?300 190 2 ?200 190 3 ?100 190 4 600 190 5 600 190 6 926 190 7 ?200 0 a. If each projects cost of capital is 12%, which project should be selected? If the cost of capital is 18%, what project is the proper choice? b. Construct NPV profiles for Projects A and B. c. What is each projects IRR? d. What is the crossover rate, and what is its significance? e. What is each projects MIRR at a cost of capital of 12%? At r = 18%? (Hint: Consider Period 7 as the end of Project Bs life.) f. What is the regular payback period for these two projects? g. At a cost of capital of 12%, what is the discounted payback period for these two projects? h. What is the profitability index for each project if the cost of capital
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