Question
NPV Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$35 $4 $14 $20 Project
NPV
Your division is considering two projects with the following cash flows (in millions):
| 0 | 1 | 2 | 3 |
| Project A | -$35 | $4 | $14 | $20 |
| Project B | -$15 | $8 | $5 | $4 |
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What are the projects' IRRs assuming the WACC is 10%? Round your answer to two decimal places. Do not round your intermediate calculations. Project A % Project B %
What are the projects' IRRs assuming the WACC is 15%? Round your answer to two decimal places. Do not round your intermediate calculations. Project A % Project B %
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If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 1.66%.) Select:Project a, Project b, neither a and b. If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 1.66%.)Select:Project a, Project b, neither a and b. If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 1.66%.) Select:Project a, Project b, neither a and b.
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Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
13th Edition
978-0073379616, 73379611, 978-0697789938
