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NPV PROFILES: TIMING DIFFERENCES An oil-drilling company must choose between two mutually exclusive extraction projects, and each costs $11.6 million. Under Plan A, all the
NPV PROFILES: TIMING DIFFERENCES An oil-drilling company must choose between two mutually exclusive extraction projects, and each costs $11.6 million. Under Plan A, all the oil would be extracted in1 year, producing a cash flow at t-1 of $13.92 million. Under Plan B, cash flows would be $2.0612 million per year for 20 years. The firm's WACC is 13% a. Construct NPV profiles for Plans A and B. Round your answers 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 "0". Negative value should be indicated by a minus sign. NPV Plan B 0% million million million million 10 million million 12 million million 15 million million 17 million million 20 million million Identify each project's IRR. Round your answers to two decimal places. Do not round your intermediate calculations. 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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