Your firm is deciding to invest in two different projects. Both have an initial cost of $ 15 million. Estimated future cash flows are as follows:

A. Calculate both projects' NPV, assuming the cost of capital is 5%, then 10%, then 15%.

B. What is the project's IRRs at the three costs of capital?
 

 

Year 1 2 3 Project A $5,000,000 10,000,000 20,000,000 Project B $20,000,000 10,000,000 6,000,000