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An oil-drilling company must choose between two mutually exclusive extraction projects, and each requires an initial outlay at t = 0 of $12.8 million. Under

An oil-drilling company must choose between two mutually exclusive extraction projects, and each requires an initial outlay at t = 0 of $12.8 million. Under Plan A, all the oil would be extracted in 1 year, producing a cash flow at t = 1 of $15.36 million. Under Plan B, cash flows would be $2.2744 million per year for 20 years. The firm's WACC is 11.3%.

Construct NPV profiles for Plans A and B. 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 values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to two decimal places.

Discount Rate NPV Plan A NPV Plan B
0 % $ million $ million
5 million million
10 million million
12 million million
15 million million
17 million million
20 million million
  1. Identify each project's IRR. Do not round intermediate calculations. Round your answers to two decimal places.

Project A: %

Project B: %

2. Find the crossover rate. Do not round intermediate calculations. Round your answer to two decimal places.

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