Question
NPV Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$21 $14 $9 $3 Project
NPV
Your division is considering two projects with the following cash flows (in millions): 0 1 2 3
Project A -$21 $14 $9 $3
Project B -$35 $20 $8 $15
What are the projects' NPVs assuming the WACC is 5%? Round your answer to two decimal places. Do not round your intermediate calculations. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
Project A $ 3.09 million
Project B $ 4.26 million
What are the projects' NPVs assuming the WACC is 10%? Round your answer to two decimal places. Do not round your intermediate calculations. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
Project A $ 1.42 million
Project B $ 1.06 million
What are the projects' NPVs assuming the WACC is 15%? Round your answer to two decimal places. Do not round your intermediate calculations. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
Project A $ -0.05 million
Project B $ -1.70 million
What are the projects' IRRs assuming the WACC is 5%? 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 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 %
If the WACC were 5% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 8.76%.)
If the WACC were 10% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 8.76%.)
If the WACC were 15% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 8.76%.)
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