"Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow -$36,000,000 O 1 2 53,500,000 -11,000,000 a. If the company requires a return of 12 percent on its investments, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Compute the IRRs for this project. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter the larger IRR in the first answer box and the smaller IRR in the second answer box. If you can only calculate one IRR, enter it in both boxes to receive partial credit. A negative answer should have a minus sign.) a. NPV $ 2,998,724.49 % b. Larger IRR Smaller IRR % Piercy, LLC, has identified the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow (A) Cash Flow (B) -$61,000 -$ 61,000 37,000 23,900 31,000 27,900 21,500 33,000 14,200 24,900 a-1. What is the IRR for each of these projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 12 percent. What is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2. Which project will you choose of you apply the NPV decision rule? C-1. Over what range of discount rates would you choose Project A? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. Over what range of discount rates would you choose Project B? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) d. At what discount rate would you be indifferent between these two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) d. At what discount rate would you be indifferent between these two projects? (Do not roun intermediate calculations and enter your answer as a percent rounded to 2 decimal pla e.g., 32.16.) 30.64 % a-1. Project A Project B a-2. 27.73% b-1. Project A Project B b-2. Project A $ 21,078.00 $ 21,896.00 Project B C-1. Above % c-2. Below % d. Discount rate 14.79% Consider the following two mutually exclusive projects: Year ONM Cash Flow (A) Cash Flow (B) -$422,000 -$38,500 45,500 20,100 60,500 13,600 77,500 17,100 537,000 13,900 4 The required return on these investments is 13 percent. a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose? your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose? years years a. Project A Project B b. Project A Project B Project A Project B d. Project A Project B c. % % e. "Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow -$36,000,000 O 1 2 53,500,000 -11,000,000 a. If the company requires a return of 12 percent on its investments, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Compute the IRRs for this project. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter the larger IRR in the first answer box and the smaller IRR in the second answer box. If you can only calculate one IRR, enter it in both boxes to receive partial credit. A negative answer should have a minus sign.) a. NPV $ 2,998,724.49 % b. Larger IRR Smaller IRR % Piercy, LLC, has identified the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow (A) Cash Flow (B) -$61,000 -$ 61,000 37,000 23,900 31,000 27,900 21,500 33,000 14,200 24,900 a-1. What is the IRR for each of these projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 12 percent. What is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2. Which project will you choose of you apply the NPV decision rule? C-1. Over what range of discount rates would you choose Project A? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. Over what range of discount rates would you choose Project B? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) d. At what discount rate would you be indifferent between these two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) d. At what discount rate would you be indifferent between these two projects? (Do not roun intermediate calculations and enter your answer as a percent rounded to 2 decimal pla e.g., 32.16.) 30.64 % a-1. Project A Project B a-2. 27.73% b-1. Project A Project B b-2. Project A $ 21,078.00 $ 21,896.00 Project B C-1. Above % c-2. Below % d. Discount rate 14.79% Consider the following two mutually exclusive projects: Year ONM Cash Flow (A) Cash Flow (B) -$422,000 -$38,500 45,500 20,100 60,500 13,600 77,500 17,100 537,000 13,900 4 The required return on these investments is 13 percent. a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose? your answers as a percent rounded to 2 decimal places, e.g., 32.16.) d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) e. Based on your answers in (a) through (d), which project will you finally choose? years years a. Project A Project B b. Project A Project B Project A Project B d. Project A Project B c. % % e