In: Finance
An oil-drilling company must choose between two mutually exclusive extraction projects, and each costs $11.8 million. Under Plan A, all the oil would be extracted in 1 year, producing a cash flow at t = 1 of $14.16 million. Under Plan B, cash flows would be $2.0967 million per year for 20 years. The firm's WACC is 12%.
Discount Rate | NPV Plan A | NPV Plan B |
0% | $ million | $ million |
5 | million | million |
10 | million | million |
12 | million | million |
15 | million | million |
17 | million | million |
20 | million | million |
Identify each project's IRR. Round your answers to two decimal places. Do not round your intermediate calculations.
Project A %
Project B %
Find the crossover rate. Round your answer to two decimal places. Do not round your intermediate calculations.