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Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 I--------------I-----------I-----------I Project A -$27 $13 $17 $8 Project

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

0 1 2 3

I--------------I-----------I-----------I

Project A -$27 $13 $17 $8

Project B -$25 $14 $11 $2

  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 90.37%.)

    -Select Project A, Project B, or 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 90.37%.)

    -Select Project A, Project B, or Neither A nor B

    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 A, Project B, or Neither A nor B

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