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An oil drilling company must choose between two mutually exclusive extraction projects, and each costs $11.6 million. Under Plan A, all the oil would be
An oil drilling company must choose between two mutually exclusive extraction projects, and each costs $11.6 million. Under Plan A, all the oil would be extracted in 1 year, producing a cash flow at t = 1 of $13.92 million. Under Plan B, cash flows would be $2.0612 million per year for 20 years. The firm's WACC is 11%. Construct NPV profiles for Plans A and B. Round your answers to two decimal places. Do not round your intermediate calculations. Enter your answers in millions. For example, an answer of $10, 550, 000 should be entered as 10.55. If an amount is zero enter "0". Negative value should be indicated by a minus sign. Identify each project's IRR. Round your answers to two decimal places. Do not round your intermediate calculations. Find the crossover rate. Round your answer to two decimal places. Do not round your intermediate calculations
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