The Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the...

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The Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of $47 million on a large-scale, integrated plant that will provide an expected cash flow stream of $7 million per year for 20 years. Plan B calls for the expenditure of $13 million to build a somewhat less efficient, more labor-intensive plant that has an expected cash flow stream of $3.1 million per year for 20 years. The firm's cost of capital is 12%. a. Calculate each project's NPV. Do not round intermediate calculations. Round your answers to the nearest dollar. Project A: $ Project B: $ Calculate each project's IRR. Round your answers to two decimal places. Project A: Project B: % % b. Set up a Project A by showing the cash flows that will exist if the firm goes with the large plant rather than the smaller plant. Round your answers to the nearest dollar. Use a minus sign to enter cash outflows, if any. Project A Cash Flows Year 0 1-20 $ $ What is the NPV for this Project A? Do not round intermediate calculations. Round your answer to the nearest dollar. Use a minus sign to enter negative value, if any. $ What is the IRR for this Project A? Round your answer to two decimal places. % c. Select the correct graph for the NPV profiles for Plan A, Plan B, and Project A. A NPV(Millions of Dollars) The correct graph is -Select- 150 125 100 75 50- B 25 5 10 15. -5 -5 -25 Cost of capital(%) -50 B 150 125 100 A 75 50 B 25 5 10 520 25 -5 -25 Cost of capital(%) -501 C D 150 150 125 125 100 100 A B 75 75 50 50- A 25 25 B 5 10 20 -5 5 10 20 -25 Cost of capital(%) -25 Cost of capital(%) -501 -501 The Pinkerton Publishing Company is considering two mutually exclusive expansion plans. Plan A calls for the expenditure of $47 million on a large-scale, integrated plant that will provide an expected cash flow stream of $7 million per year for 20 years. Plan B calls for the expenditure of $13 million to build a somewhat less efficient, more labor-intensive plant that has an expected cash flow stream of $3.1 million per year for 20 years. The firm's cost of capital is 12%. a. Calculate each project's NPV. Do not round intermediate calculations. Round your answers to the nearest dollar. Project A: $ Project B: $ Calculate each project's IRR. Round your answers to two decimal places. Project A: Project B: % % b. Set up a Project A by showing the cash flows that will exist if the firm goes with the large plant rather than the smaller plant. Round your answers to the nearest dollar. Use a minus sign to enter cash outflows, if any. Project A Cash Flows Year 0 1-20 $ $ What is the NPV for this Project A? Do not round intermediate calculations. Round your answer to the nearest dollar. Use a minus sign to enter negative value, if any. $ What is the IRR for this Project A? Round your answer to two decimal places. % c. Select the correct graph for the NPV profiles for Plan A, Plan B, and Project A. A NPV(Millions of Dollars) The correct graph is -Select- 150 125 100 75 50- B 25 5 10 15. -5 -5 -25 Cost of capital(%) -50 B 150 125 100 A 75 50 B 25 5 10 520 25 -5 -25 Cost of capital(%) -501 C D 150 150 125 125 100 100 A B 75 75 50 50- A 25 25 B 5 10 20 -5 5 10 20 -25 Cost of capital(%) -25 Cost of capital(%) -501 -501