Question

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NPV

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

0 1 2 3

Project A	-$35	$4	$14	$20
Project B	-$15	$8	$5	$4

A. 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

B. 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   %

Answer 1

NPV at WACC of 5%

Year	0	1	2	3
Cashflow	-34	4	14	20
PV	-34.00	3.81	12.70	17.28

NPV of project A = -$0.22 Million

Year	0	1	2	3
Cashflow	-15	8	5	4
PV	-15.00	7.62	4.54	3.46

NPV of project B = $0.61 Million

NPV at WACC of 10%

Year	0	1	2	3
Cashflow	-34	4	14	20
PV	-34.00	3.64	11.57	15.03

NPV of project A = -$ 3.77 Million

Year	0	1	2	3
Cashflow	-15	8	5	4
PV	-15.00	7.27	4.13	3.01

NPV of project B = -$0.59 Million

NPV at 15% of WACC.

Year	0	1	2	3
Cashflow	-34	4	14	20
PV	-34.00	3.48	10.59	13.15

NPV of project A = -$6.79Million

Year	0	1	2	3
Cashflow	-15	8	5	4
PV	-15.00	6.96	3.78	2.63

NPV of project B = -$1.63 Million

IRR will be same for all WACC because WACC doesn't impact IRR

IRR of project A = 4.72%

IRR of project B = 7.45%