Your division is considering two projects with the following cash flows (in mill
ID: 2625087 • Letter: Y
Question
Your division is considering two projects with the following cash flows (in millions):
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 $10,550,000 should be entered as 10.55.
Project A ?$ million
Project B ? $ 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 ?%
Explanation / Answer
$0.00 1 2 3 NPV IRR Cash flow Project A $ (29.00) $ 15.00 $ 13.00 $ 3.00 Cash flow Project B $ (16.00) $ 8.00 $ 3.00 $ 6.00 Present value of Cash flow at WACC 5% Project A ($29.00) $14.29 $11.79 $2.59 ($0.33) million 4.25% Present value of Cash flow at WACC 5% Project B ($16.00) $7.62 $2.72 $5.18 ($0.48) million 3.30% Present value of Cash flow at WACC 10% Project A ($29.00) $12.99 $9.74 $1.95 ($4.32) million 4.25% Present value of Cash flow at WACC 10% Project B ($16.00) $6.63 $2.25 $3.41 ($3.72) million 3.30% Present value of Cash flow at WACC 15% Project A ($29.00) $11.29 $7.37 $1.28 ($9.06) million 4.25% Present value of Cash flow at WACC 15% Project B ($16.00) $6.63 $1.70 $3.41 ($4.27) million 3.30%
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