Net Present Value (NPV)
Internal Rate of Return (IRR)
Modified Internal Rate of Return (MIRR)
Payback Period

CAPITAL BUDGETING CRITERIA

A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows:

1. Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations.
   Project M    $
   Project N    $

Calculate IRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations.
Project M      %
Project N      %

Calculate MIRR for each project. Round your answers to two decimal places. Do not round your intermediate calculations.
Project M      %
Project N      %

Calculate payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations.
Project M      years
Project N      years

Calculate discounted payback for each project. Round your answers to two decimal places. Do not round your intermediate calculations.
Project M      years
Project N      years

2. Assuming the projects are independent, which one(s) would you recommend?
   

3. If the projects are mutually exclusive, which would you recommend?
   

4. Notice that the projects have the same cash flow timing pattern. Why is there a conflict between NPV and IRR?