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Your division is considering two projects with the following cash flows (in millions):   0 1 2 3 -$29 $15 $13 $3 Project A         -$16 $8 $3 $6 Project B                   What are the projects' NPVs assuming the WACC is 5%? Enter your answer in millions

Finance Oct 20, 2021

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

  0 1 2 3
-$29 $15 $13 $3 Project A        
-$16 $8 $3 $6 Project B        
         
  1. 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

  2. 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: %

  3. If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 5.9%.)

    -Select-Project AProject BNeither A nor B

    If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 5.9%.)

    -Select-Project AProject BNeither A nor B

    If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 5.9%.)

    -Select-Project AProject BNeither A nor B

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