Question
Your division is considering two projects with the following cash flows (in millions): Project A -$21 $14 $9 $3 Project B -$35 $20 $8 $15
Your division is considering two projects with the following cash flows (in millions):
| Project A | -$21 | $14 | $9 | $3 |
| Project B | -$35 | $20 | $8 | $15 |
| 0 | 1 | 2 | 3 |
-
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 8.76%.)
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 8.76%.)
Project A Project B 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 8.76%.)
Project A Project B Neither A nor B
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Gapenskis Fundamentals Of Healthcare Finance
Authors: Paula H. Song, Kristin L. Reiter
3rd Edition
1567939759, 978-1567939750
