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NPV-Your division is considering two projects with the following cash flows (in millions) 0-------------1-----------------2--------------------3 Project A-$25----------$5---------------$10----------------$17 Project B-$20---------$10---------------$9-----------------$6 A.) What are the projects NPV's assuming
NPV-Your division is considering two projects with the following cash flows (in millions)
0-------------1-----------------2--------------------3
Project A-$25----------$5---------------$10----------------$17
Project B-$20---------$10---------------$9-----------------$6
A.) What are the projects NPV's assuming the WACC is 5%?10%15%?
B. What are the projects IRR's at each of these WACC's?
C.) If the WACC was 5% and A and B were mutually exclusive, which project would you choose? What if the WACC was 10%? 15%? (Hint: The crossover rate is 7.81%)
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