Question

A company is considering two mutually exclusive expansion plans. Plan A requires a $41 million expenditure on a large-scale integrated plant that would provide expected cash flows of $6.55 million per year for 20 years. Plan B requires a $11 million expenditure to build a somewhat less efficient, more labor-intensive plant with an expected cash flow of $2.47 million per year for 20 years. The firm's WACC is 11%. Calculate each project's NPV. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places. Plan A:     $   11.16 million Plan B:     $ 8.67 million Calculate each project's IRR. Round your answers to one decimal place. Plan A: 15.00% Plan B: 22.04% By graphing the NPV profiles for Plan A and Plan B, determine the crossover rate. Round your answer to the nearest whole number.   % Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to one decimal place.   % Is NPV better than IRR for making capital budgeting decisions that add to shareholder value? Hi, please help with b, c, and d.

Answer 1