Question

NPV

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

0

1

2

3

Project A	-$29	$15	$13	$3
Project B	-$16	$8	$3	$6

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

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   %

If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 5.9%.)
Project A | Project B | Neither 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%.)
Project A | Project B | Neither 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%.)
Project A | Project B | Neither A, nor B

Answer 1