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You have just started your summer internship, and your boss asks you to review a recent analysis that was done to compare three alternative proposals

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You have just started your summer internship, and your boss asks you to review a recent analysis that was done to compare three alternative proposals to enhance the firm's manufacturing facility. You find that the prior analysis ranked the proposals according to their IRR, and recommended the highest IRR option, Proposal A. You are concemed and decide to rodo the analysis using NPV to determine whether this recommendation was appropriate. But while you are confident the IRRs were computed correctly, it seems that some of the underlying data regarding the cash flows that were estimated for each proposal was not included in the report. For Proposal B. you cannot find information regarding the total initial investment that was required in Year 0. And for Proposal C, you cannot find the data regarding additional salvage value that will be recovered in Year 3. Here is the information you have (in $ millions): Year 1 Proposal B C IRR 60.0% 59.5% 50.8% Year 0 $100 ? - $100 $30 $0 $37 Year 2 $153 $206 $0 Year 3 $88 $95 $204 + ? Suppose the appropriate cost of capital for each alternative is 10%. Using this information, determine the NPV of each proposal. Which project should the firm choose? Why is ranking the projects by their IRR not valid in this situation? Proposal IRR Year Year 1 Year 2 Year 3 A 60.0% $100 $30 $153 $88 B 59.5% $0 $206 $95 50.8% $100 $37 $0 Suppose the appropriate cost of capital for each alternative is 10%. Using this information, determine the NPV of each proposal The NPV for proposal Als Smillion (Round to two decimal places) The NPV for proposal B is s millon (Round to two decimal places.) The NPV for proposal is $ million (Round to two decimal places.) Which project should the firm choose? The firm should choose (Select from the drop-down menu.)

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