Question

Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$21 $14 $9 $3 Project B -$35 $20 $8 $15 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:    % Project B:    % If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 8.76%.) If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 8.76%.) If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 8.76%.)

Answer 1