Question
Your division is considering two investment projects, each of which requires an up-front expenditure of $19 million. You estimate that the investments will produce the
Your division is considering two investment projects, each of which requires an up-front expenditure of $19 million. You estimate that the investments will produce the following net cash flows:
Year Project A Project B
1 $4,000,000 $20,000,000
2 $10,000,000 $10,000,000
3 $20,000,000 $7,000,000
What are the two projects' net present values, assuming the cost of capital is 5%? Do not round intermediate calculations. Round your answers to the nearest dollar.
Project A: $
Project B: $
What are the two projects' net present values, assuming the cost of capital is 10%? Do not round intermediate calculations. Round your answers to the nearest dollar.
Project A: $
Project B: $
What are the two projects' net present values, assuming the cost of capital is 15%? Do not round intermediate calculations. Round your answers to the nearest dollar.
Project A: $
Project B: $ What are the two projects' IRRs at these same costs of capital? Do not round intermediate calculations. Round your answers to two decimal places.
Project A: %
Project B: %
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