In: Finance
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: %
Project 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%.)
-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
20.19%.)
-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
20.19%.)
-Select-Project AProject BNeither A, nor BItem 15