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Your division is considering two projects with the following net cash flows 0 1 2 3 Project A -$35 $4 $14 $20 Project B -$15
Your division is considering two projects with the following net cash flows 0 1 2 3 Project A -$35 $4 $14 $20 Project B -$15 $8 $5 $4 a.What are the projects NPVs assuming the WACC is 5%? 10%? 15? b.What are the projects IRR at each of these WACCs? c.If the WACC was 5% and A and B were mutually exclusive, which project would you choose? What if the WACC was 10% and 15%? (Hint: The crossover rate is 7.81%)
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