Your division is considering two investment projects, each of which requires an up-front expenditure of $15 million. You estimate that the investments will produce the following net cash flows:

Year

Project A

Project B

1

$5,000,000

$20,000,000

2

10,000,000

10,000,000

3

20,000,000

6,000,000

1. What are the two projects net present values, assuming the cost of capital is 5%? 10%? 15%?

What are the two projects IRRs at these same costs of capital?