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10.7). NPV wk4 Your division is considering two investment projects, each of which requires an up-front expenditure of $15 million. You estimate that the investments
10.7). NPV wk4
Your division is considering two investment projects, each of which requires an up-front expenditure of $15 million. You estimate that the investments will produce the following net cash flows:
Year Project A Project B
__________________________________________________________________________________
1 $ 5,000,000 $20,000,000
2 10,000,000 10,000,000
3 20,000,000 6,000,000
a). What are the two projects' net present values, assuming the cost of capital is 5%? 10%? 15%?
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