Question
NPV Your division is considering two investment projects, each of which requires an up-front expenditure of...
NPV
Your division is considering two investment projects, each of which requires an up-front expenditure of $23 million. You estimate that the investments will produce the following net cash flows:
| Year | Project A | Project B |
| 1 | $ 5,000,000 | $20,000,000 |
| 2 | 10,000,000 | 10,000,000 |
| 3 | 20,000,000 | 8,000,000 |
What are the two projects' net present values, assuming the cost of capital is 5%? Round your answers to the nearest dollar.
Project A $ 8,107,500
Project B $ 12,026,400
What are the two projects' net present values, assuming the cost of capital is 10%? Round your answers to the nearest dollar.
Project A $ 4,835,000
Project B $ 9,454,400
What are the two projects' net present values, assuming the cost of capital is 15%? Round your answers to the nearest dollar.
Project A $ 2,058,500
Project B $ 7,211,000
What are the two projects' IRRs at these same costs of capital? Round your answers to two decimal places. Project A %
Project B %
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