In: Finance
Your division is considering two projects with the following cash flows (in millions):
0 | 1 | 2 | 3 |
Project A | -$20 | $5 | $9 | $12 |
Project B | -$13 | $8 | $7 | $3 |
What are the projects' NPVs assuming the WACC is 5%? Round your
answer to two decimal places. Do not round your intermediate
calculations. Enter your answer in millions. For example, an answer
of $10,550,000 should be entered as 10.55. Negative value should be
indicated by a minus sign.
Project A $ million
Project B $ million
What are the projects' NPVs assuming the WACC is 10%? Round your
answer to two decimal places. Do not round your intermediate
calculations. Enter your answer in millions. For example, an answer
of $10,550,000 should be entered as 10.55. Negative value should be
indicated by a minus sign.
Project A $ million
Project B $ million
What are the projects' NPVs assuming the WACC is 15%? Round your
answer to two decimal places. Do not round your intermediate
calculations. Enter your answer in millions. For example, an answer
of $10,550,000 should be entered as 10.55. Negative value should be
indicated by a minus sign.
Project A $ million
Project B $ million
What are the projects' IRRs assuming the WACC is 5%? Round your
answer to two decimal places. Do not round your intermediate
calculations.
Project A %
Project B %
What are the projects' IRRs assuming the WACC is 10%? Round your
answer to two decimal places. Do not round your intermediate
calculations.
Project A %
Project B %
What are the projects' IRRs assuming the WACC is 15%? Round your
answer to two decimal places. Do not round your intermediate
calculations.
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
3.86%.)
-Select-Project AProject BNeither A, nor BItem 13
If the WACC was 10% and A and B were mutually exclusive, which
project would you choose? (Hint: The crossover rate is
3.86%.)
-Select-Project AProject BNeither A, nor BItem 14
If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 3.86%.)
For part C, select the project that has higher NPV, given that project would add higher value to the firm. We should always select the project with higher and positive NPV.