Question
Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$27 $13 $17 $8 Project B
Your division is considering two projects with the following cash flows (in millions):
0 | 1 | 2 | 3 |
Project A | -$27 | $13 | $17 | $8 |
Project B | -$25 | $14 | $11 | $2 |
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
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: $ million
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
Project B: $ million
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: %
If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 90.37%.)
-Select-Project AProject BNeither A nor BItem 13
If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 90.37%.)
-Select-Project AProject BNeither A nor BItem 14
If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 90.37%.)
-Select-Project AProject BNeither A nor B
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