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An oil-driling company must choose between two mutualif exclusive extraction projects, and each requires an intial outiay at: f=0 of 512.2 miltion. Under Plan A.

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An oil-driling company must choose between two mutualif exclusive extraction projects, and each requires an intial outiay at: f=0 of 512.2 miltion. Under Plan A. a. Construct NPV prohies for Plans A and B. Enter your answers in millons. For example, an answer of $10,550,000 should be entered as 10.55 . If an amount is zero, enter "o: Negative values, if any, shouid be indicated by e mirus sign. Do not round intermediate cakulabions. Round vour answers to two decimal place: Identify each projects tak. Do not roond intermed iate calculations. flound your anwers to two decimal places Project A: Project i: Find the crossover rote, Do not round interinediate calculatoons pround vour answer to two decimal places: b. Is it logical to assume that the firm would take on alf avalable independent, average-risk projects wath returns greater than 12.6% ? If all available projects with returns greater than 12.8% have been undertaken, does this mean that cash flows from past investments have an opporfunity cost of only 12.8%, because all the company can do with these cosh flows is to replace money that has a cost of 12.8% ? Does this imply that the WACC is the correct reinvestment rate assumption for a project's cash fiows

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