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Excel Online Structured Activity: NPV profiles A-Z A company is considering two mutually exclusive expansion plans. Plan A requires a $40 milion expenditure on a
Excel Online Structured Activity: NPV profiles A-Z A company is considering two mutually exclusive expansion plans. Plan A requires a $40 milion expenditure on a large-scale integrated plant that would provide expected cash flows of $6.39 million per year for 20 years. Plan B requires a $12 milion expenditure to buid a somewhat less efficient, more labor intensive plant with an expected cash flow of $2.69 million per year for 20 years. The firm's WACC is 10%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below X Open spreadsheet a. Calculate each project's NPV. Round your answers to two decimal places. Do not round your intermedate cakulations. Enter your answers in milions. For example, an answer of $10,550,000 should be entered as 10.55 Plan A: $ milion Plan B: $ milian Calculate each project's IRR. Round your answer to two decimal places. Plan A: % Plan B b. By graphing the NPV profiles for Plan A and Plan B, approximate the crossover rate to the nearest percent. C. Calculate the crossover rate where the two projects PVs are equal. Round your answer to two decimal places %
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