The Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of $44 million on a large-scale, integrated plant that will provide an expected cash flow stream of $6 million per year for 20 years. Plan B calls for the expenditure of $14 million to build a somewhat less efficient, more labor-intensive plant that has an expected cash flow stream of $2.7 million per year for 20 years. The firm's cost of capital is 9%.

1. Calculate each project's NPV. Round your answers to the nearest dollar.

Project A ______ $

Project B ______$

1. Calculate each project's IRR. Round your answers to two decimal places.

Project A _____%

Project B _____%

1. Set up a Project by showing the cash flows that will exist if the firm goes with the large plant rather than the smaller plant.

Year Project Cash Flows

0 $

1-20 $

1. What is the NPV for this Project ? Round your answer to the nearest dollar.

_____$

1. What is the IRR for this Project ? Round your answer to two decimal places.

_____%