fundamental of finance

Question # 06 Chastain Corporation is considering two mutually exclusive expansion plans. Plan J requires a PKR60million expenditure on a large-scale integrated plant that would provide expected cash flows of PKR8.5million per year for 15 years. Plan S requires a PKR6 million expenditure to build a somewhat less efficient, more labor-intensive plant with expected cash flows of PKR1.5million per year for 15 years. The firm's WACC is 6%. [8marks) a) Calculate each project's NPV. [2marks] b) Calculate profitability index of the two projects. [2marks] c) Following information provided below, graph the NPV profiles for Plan J and Plan S and approximate the crossover rate. [4marks] WACC NPV (Plan J) NPV (Plan S) PKR millions PKR millions 0.00% 67.50 16.50 5.00% 26.88 9.11 10.00% 4.23 4.92 11.00% 1.01 4.31 11.34% 0.00 4.12 15.00% -8.95 2.41 20.00%-16.88 0.84 24.00% -20.96 0.00