Colsen Communications is trying to estimate the first year cash flow (at Year 1) for a proposed project The assets required for the project were fully depreciated at the time of purchase The financial staff has collected the following information on the project Sales revenues $10 million Operating costs 8 million Interest expense 1 million The company has a 25 tax rate, and its WACC is 13 Write out your answers completely For example, 13 million should be entered as 13,000,000 What is the project's operating cash flow for the first year (t 1) Round your answer to the nearest dollar $ If this project would cannibalize other projects by $1 5 million of cash flow before taxes per year, how would this change your answer to part a Round your answer to the nearest dollar The firm's OCF would now be $ our division is considering two projects with the following cash flows (in millions) 0 1 2 3 Project A $16 $7 $9 $10 Project B $26 $14 $20 $11 What are the projects' NPVs assuming the WACC is 5 Enter your answer in millions For example, an answer of $10,550,000 should be entered as 10 55 Negative values, if any, should be indicated by a minus sign Do not round intermediate calculations Round your answer to two decimal places Project A $ million Project B $ million What are the projects' NPVs assuming the WACC is 10 Enter your answer in millions For example, an answer of $10,550,000 should be entered as 10 55 Negative values, if any, should be indicated by a minus sign Do not round intermediate calculations Round your answer to two decimal places Project A $ million Project B $ million What are the projects' NPVs assuming the WACC is 15 Enter your answer in millions For example, an answer of $10,550,000 should be entered as 10 55 Negative values, if any, should be indicated by a minus sign Do not round intermediate calculations Round your answer to two decimal places Project A $ million Project B $ million What are the projects' IRRs assuming the WACC is 5 Do not round intermediate calculations Round your answer to two decimal places Project A Project B What are the projects' IRRs assuming the WACC is 10 Do not round intermediate calculations Round your answer to two decimal places Project A Project B What are the projects' IRRs assuming the WACC is 15 Do not round intermediate calculations Round your answer to two decimal places Project A Project B If the WACC was 5 and A and B were mutually exclusive, which project would you choose (Hint The crossover rate is 48 57 ) If the WACC was 10 and A and B were mutually exclusive, which project would you choose (Hint The crossover rate is 48 57 ) If the WACC was 15 and A and B were mutually exclusive, which project would you choose (Hint The crossover rate is 48 57 )

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Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The assets required for the project were fully

Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The assets required for the project were fully depreciated at the time of purchase. The financial staff has collected the following information on the project:

Sales revenues	$10 million
Operating costs	8 million
Interest expense	1 million

The company has a 25% tax rate, and its WACC is 13%.

Write out your answers completely. For example, 13 million should be entered as 13,000,000.

What is the project's operating cash flow for the first year (t = 1)? Round your answer to the nearest dollar. $
If this project would cannibalize other projects by $1.5 million of cash flow before taxes per year, how would this change your answer to part a? Round your answer to the nearest dollar. The firm's OCF would now be $ .

our division is considering two projects with the following cash flows (in millions):

Project A	-$16	$7	$9	$10
Project B	-$26	$14	$20	$11

What are the projects' NPVs assuming the WACC is 5%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places.

Project A: $ million

Project B: $ million

What are the projects' NPVs assuming the WACC is 10%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places.

Project A: $ million

Project B: $ million

What are the projects' NPVs assuming the WACC is 15%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places.

Project A: $ million

Project B: $ million
What are the projects' IRRs assuming the WACC is 5%? Do not round intermediate calculations. Round your answer to two decimal places.

Project A: %

Project B: %

What are the projects' IRRs assuming the WACC is 10%? Do not round intermediate calculations. Round your answer to two decimal places.

Project A: %

Project B: %

What are the projects' IRRs assuming the WACC is 15%? Do not round intermediate calculations. Round your answer to two decimal places.

Project A: %

Project B: %
If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 48.57%.)

If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 48.57%.)

If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 48.57%.)