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Your division is considering two projects with the following cash flows (in millions): Project A Project B 0 -$20 -$13 1 $5 $8 million 2
Your division is considering two projects with the following cash flows (in millions): Project A Project B 0 -$20 -$13 1 $5 $8 million 2 $9 $7 a. What are the projects' NPVs assuming the WACC is 5%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ million Project B: $ million % 3 What are the projects' NPVs assuming the WACC is 10%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ million Project B: $ What are the projects' NPVs assuming the WACC is 15% ? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ million % $12 $3 Project B: million b. What are the projects' IRRs assuming the WACC is 5%? Do not round intermediate calculations. Round your answer to two decimal places. Project A: Project B: b. What are the projects' IRRS assuming the WACC is 5%? Do not round intermediate calculations. Round your answer to two decimal places. Project A: Project B: What are the projects' IRRs assuming the WACC is 10%? Do not round intermediate calculations. Round your answer to two decimal places. Project A: Project B: What are the projects' IRRs assuming the WACC is 15%? Do not round intermediate calculations. Round your answer to two decimal places. Project A: Project B: c. If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 3.86%.) -Select- -Select- % % -Select- -Select- Project A Project B Neither A nor B % % % If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 3.86%.) % If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 3.86%.)
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