Question

NPV Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$20 $5 $9 $12 Project B -$13 $8 $7 $3 What are the projects' NPVs assuming the WACC is 5%? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Project A $ 5 million Project B $ 8 million What are the projects' NPVs assuming the WACC is 10%? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Project A $ million Project B $ million What are the projects' NPVs assuming the WACC is 15%? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Project A $ million Project B $ million What are the projects' IRRs assuming the WACC is 5%? Round your answer to two decimal places. Project A % Project B % What are the projects' IRRs assuming the WACC is 10%? Round your answer to two decimal places. Project A % Project B % What are the projects' IRRs assuming the WACC is 15%? Round your answer to two decimal places. Project A % Project B % If the WACC were 5% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 3.86%.) If the WACC were 10% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 3.86%.) If the WACC were 15% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 3.86%.)

Answer #1

NPV of Both Project at Different discount rate is calculated in excel and screen shot provided below:

At 5% discount rate, NPV of project A is $3.29 and NPV of project B is $3.56.

At 10% discount rate, NPV of project A is $1.00 and NPV of project B is $2.31.

At 15% discount rate, NPV of project A is -$0.96 and NPV of project B is $1.22.

b.

IRR calculation does not use discount rate. So, IRR value will be similar at all three discount rate. So, IRR of project is calculated in excel and screen shot provided below:

IRR of project A is 12.46% and IRR of project B is 21.49%.

c.

At 15% discount rate, NPV of project A is -$0.96 and NPV of project B is $1.22. at 15% discount rate, NPV of project B is higher than NPV of project A. So At 15% discount rate, project B should be accepted.

Your division is considering two projects with the following
cash flows (in millions): 0 1 2 3 Project A -$20 $5 $9 $12 Project
B -$13 $8 $7 $3 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:...

NPV
Your division is considering two projects with the following
cash flows (in millions):
0 1 2 3
Project A -$21 $14 $9 $3
Project B -$35 $20 $8 $15
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...

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 $...

NPV
Your division is considering two projects with the following
cash flows (in millions):
0
1
2
3
Project A
-$11
$4
$7
$1
Project B
-$20
$12
$5
$9
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...

14.
Your division is considering two projects with the following
cash flows (in millions):
0
1
2
3
Project A
-$20
$5
$9
$12
Project B
-$13
$8
$7
$3
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...

Your division is considering two projects with the following
cash flows (in millions):
0
1
2
3
Project A
-$20
$5
$9
$12
Project B
-$13
$8
$7
$3
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...

NPV
Your division is considering two projects with the following
cash flows (in millions):
0
1
2
3
Project A
-$27
$13
$17
$8
Project B
-$25
$14
$11
$2
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...

Your division is considering two projects with the following
cash flows (in millions):
0 1 2 3 Project A -$19 $8 $15 $17
Project B -$17 $11 $8 $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 $...

Your division is considering two projects with the following
cash flows (in millions):
0
1
2
3
Project A
-$27
$13
$17
$8
Project B
-$25
$14
$11
$2
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...

eBook Problem Walk-Through
Your division is considering two projects with the following
cash flows (in millions):
0
1
2
3
Project A
-$20
$5
$9
$12
Project B
-$13
$8
$7
$3
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...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 2 minutes ago

asked 6 minutes ago

asked 7 minutes ago

asked 23 minutes ago

asked 23 minutes ago

asked 25 minutes ago

asked 30 minutes ago

asked 37 minutes ago

asked 41 minutes ago

asked 44 minutes ago

asked 1 hour ago

asked 1 hour ago