Your division is considering two projects with the following cash flows (in mill
ID: 2793077 • 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. 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 48.57%.)
-Select-Project AProject BNeither A, nor BItem 13
If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 48.57%.)
-Select-Project AProject BNeither A, nor BItem 14
If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 48.57%.)
-Select-Project AProject BNeither A, nor BItem 15
Explanation / Answer
1)
at 5%
Project A NPV=-16+7/1.05^1+9/1.05^2+10/1.05^3=7.47
Project B NPV=-26+14/1.05^1+20/1.05^2+11/1.05^3=14.98
2)
10%
Project A NPV=-16+7/1.1^1+9/1.1^2+10/1.1^3=5.31
Project B NPV=-26+14/1.1^1+20/1.1^2+11/1.1^3=11.52
3)
15%
Project A NPV=-16+7/1.15^1+9/1.15^2+10/1.15^3=3.47
Project B NPV=-26+14/1.15^1+20/1.15^2+11/1.15^3=8.53
the above are the answer
we do only one main question based on Chegg rule.
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