Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$35 $4 $14 $20 Project B

Your division is considering two projects with the following cash flows (in millions):

0 1 2 3
Project A -$35 $4 $14 $20
Project B -$15 $8 $5 $4
  1. 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

  2. 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: %

  3. If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 1.66%.)(Project A, project b, neither)

    -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 1.66%.) (Project A, project b, neither)

    -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 1.66%.) (Project A, project b, neither)

    -Select-Project AProject BNeither A nor BItem 15


image text in transcribed
Th 11. Cnd of chanter Problems - The Easics of Cigital Budgeting Project A Project B intermediate covalations, Asyne your antwer te two decomal place. Project his . milion Preject B: 5 malien internediate caiculations. Aound yeur answer to two decomal plack. FrojectA:1Prefecta:5milionmasen Breemedote caladotiens. Found your answer to two decher plack. hroject A: 5 melisen. Project B: 5 mation Project A : Project or Fropect A.- Project a: Project A: Froject be

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Lords Of Finance The Bankers Who Broke The World

Authors: Liaquat Ahamed

1st Edition

0143116800, 978-0143116806

More Books

Students also viewed these Finance questions