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11-4: Project L costs $40,000, its expected cash inflows are $10,000 per year for 11 years,...

11-4: Project L costs $40,000, its expected cash inflows are $10,000 per year for 11 years, and its WACC is 9%. What is the project's payback? Round your answer to two decimal places.

11-6: Your division is considering two projects with the following cash flows (in millions):

0 1 2 3

Project A -$17 $8 $8 $3

Project B -$26 $13 $10 $9

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: %
roject B: %

If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 20.19%.)

If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 20.19%.)

If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 20.19%.)

Solutions

Expert Solution

jeff jeffy answered 4 months ago
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