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Wildhorse Industries is expanding its product line and its production capacity. The costs and expected cash flows of the two independent projects are given in
Wildhorse Industries is expanding its product line and its production capacity. The costs and expected cash flows of the two independent projects are given in the following table. The firm uses a discount rate of 14.08 percent for such projects. Year Product Line Expansion 0 1 Production Capacity Expansion -$7,330,300 2,578,000 2,578,000 2,578,000 3,131,800 3,131,800 -$2,802,200 753,900 882,400 882,400 882,400 882,400 2 3 4 5 a. What are the NPVs of the two projects? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.) NPV of product line expansion is $ NPV of production capacity expansion is $ b. Should both projects be accepted? or either? or neither? Explain your reasoning. Wildhorse should accep both projects only the product line expansion neither project only the production capacity expansion e Textbook and Medi
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