NPV Your division is considering two projects with the following cash flows (in
ID: 2798563 • Letter: N
Question
NPV
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
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 $2What 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
Explanation / Answer
Project A
CF0 = -27
CF1 = 13
CF2 = 17
CF3 = 8
WACC = 5%
NPV = -27 + 13/(1.05) + 17/ (1.05)2 + 8/(1.05)3
NPV = 7.71
Project B
CF0 = -25
CF1 = 14
CF2 = 11
CF3 = 2
WACC = 5%
NPV = -25 + 14/(1.05) + 11/ (1.05)2 + 2/(1.05)3
NPV = 0.04
Part 2
Project A
WACC = 10%
NPV = -27 + 13/(1.1) + 17/ (1.1)2 + 8/(1.1)3
NPV = 4.88
Project 2
WACC = 10%
NPV = -25 + 14/(1.1) + 11/ (1.1)2 + 2/(1.1)3
NPV = -1.68
Part 3
WACC = 15%
NPV = -27 + 13/(1.15) + 17/ (1.15)2 + 8/(1.15)3
NPV = 2.42
Project B
WACC = 15%
NPV = -25 + 14/(1.15) + 11/ (1.15)2 + 2/(1.15)3
NPV = -3.19
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