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NPV PROFILES: TIMING DIFFERENCES An oil-drilling company must choose between two mutually exclusive extraction projects, and each costs $12 million. Under Plan A, al the
NPV PROFILES: TIMING DIFFERENCES An oil-drilling company must choose between two mutually exclusive extraction projects, and each costs $12 million. Under Plan A, al the oil would be extracted in 1 year, producing a cash flow att-1 of $14.4 mil lion. Under Plan B, cash flows would be $2.1323 million per year for 20 years. The firm's WACC IS 12%. a. Construct NPV profiles for Plans A and B. Round your ansvers to two decimal places. Do not round your intermediate calculations. 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 "". Negative value should be indicated by a minus sign. 096 millicn million million million million 12 million million 15 million million 17 rmillion million 20 million Identify each project's IRR. Round your answers to two decimal places. Do not ound youn Project A Project B Find the crossover rate. Round your answer to two decimal places. Do not round your intermediate calculations
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