Question

NPV

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

1. 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

2. 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   %

3. If the WACC were 5% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 8.76%.)
   -Select-Project A, Project B, Neither A, nor BItem 13

   If the WACC were 10% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 8.76%.)
   -Select-Project A, Project B, Neither A, nor BItem 14

   If the WACC were 15% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 8.76%.)
   -Select-Project A, Project B, Neither A, nor B

Answer 1