Q Search this course signment 7- Chapter 10 Scale Differences The Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of 547 million on a large-scale, Integrated plant that will provide an expected cash flow stream of $7 million per year for 20 years. Man B calls for the expenditure of $13 million to build a somewhat less efficient, more labor-intensive plant that has an expected cash flow stream of $3.1 million per year for 20 years. The firm's cost of capital is 12%. a. Calculate each project's NPV. Do not round Intermediate calculations, Roulet your answers to the nearest dollar Project A: $ A-Z Project B: $ Calculate each project's IRR. Round your answers to two decimal places. Project A: 9% Project B: 96 b. Set up a Project A by showing the cash flows that will exist if the firm goes with the large plant rather than the smaller plant. Round your answers to the nearest dollar. Use a minus sign to enter cash outflows, if any. Year Project A Cash Flows 1-20 $ What is the NPV for this project A? Do not found intermediate calculations. Round your answer to the nearest dollar, Use a minus sign to enter negative value, if any. cimal places. HU Search this course ignment 7- Chapter 10 What is the IRR for this project A? Round your answer to two decimal places. % c. Select the correct graph for the NPV profiles for Plan A, Plan B, and Project A. A B A 150 1507 125 1251 100 NPV Millions of Dollars) NPV Millions of Dollars) 100+ 4 75+ 75 50 50 EN A 25 25 A B 1 25 -5 5 10 -25 cost of capital %) -501 10 -25 Cost of capital -501 D 1501 150 125 125+ 100B Millions of Dollars) Millions of Dollars) 100 75+ 75 257 PM 11/25/2020 10 Q Search ament 7- Chapter 10 B 5 20 25 5 10 -25+ Cost of capital -501 -25 Cost of capitak %) -501 D 150 150 125 125 100 100 B NPV Millions of Dollars) NPV(Millions of Dollars) A 75 75 + 50 50 B 251 25- 4 in 5 25 10 -25 cost of capitak %) -50) 5 10 -25 cost of capital 99 -501 The correct graph is graph B Check My We