Question
NPV Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$29 $15 $13 $3 Project
NPV
Your division is considering two projects with the following cash flows (in millions):
| 0 | 1 | 2 | 3 |
| Project A | -$29 | $15 | $13 | $3 |
| Project B | -$16 | $8 | $3 | $6 |
-
What are the projects' IRRs assuming the WACC is 5%? Do not round intermediate calculations. Round your answer to two decimal places.
Project A: %
Project B: %
What are the projects' IRRs assuming the WACC is 10%? Do not round intermediate calculations. Round your answer to two decimal places.
Project A: %
Project B: %
What are the projects' IRRs assuming the WACC is 15%? Do not round intermediate calculations. Round your answer to two decimal places.
Project A: %
Project B: %
-
If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 5.9%.)
If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 5.9%.)
If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 5.9%.)
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Project Finance For Construction
Authors: Anthony Higham, Carl Bridge, Peter Farrell
1st Edition
1138941298, 978-1138941298
