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The NPV profiles of two mutually exclusive projects, Project Dashes and Project Solids, are as shown below, and the cashflow for the two projects are
The NPV profiles of two mutually exclusive projects, Project Dashes and Project Solids, are as shown below, and the cashflow for the two projects are given here. a. What are points A, B and C respectively on the graph? (Show how you get the numbers and indicate what they are.) b. If a companys WACC is 5%, which project should it choose? What if the companys WACC is 15%? What if the WACC is 25%? Must explain the reasoning for your answers. Cash FLows Year Project Dashes Project Solids 0 -$73,920 -$73,920 1 1,520 58,000 2 10,950 27,000 3 38,800 10,000 4 65,990 2,178 NPV Profiles
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