A company is considering two mutually exclusive expansion plans. Plan A requires a $39 million initial outlay on a large-scale integrated plant that would provide expected cash flows of $6.23 million per year for 20 years. Plan B requires a $13 million initial outlay to build a somewhat less efficient, more labor-intensive plant with expected cash flows of $2.91 million per year for 20 years. The firm's WACC is 11%.

1. Calculate each project's NPV. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places.

Plan A: $ million

Plan B: $ million

2. Calculate each project's IRR. Round your answers to one decimal place.

Plan A: %

Plan B: %

3. By graphing the NPV profiles for Plan A and Plan B, determine the crossover rate. Approximate your answer to the nearest whole number.

%

4. Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to one decimal place.

%

5. Is NPV better than IRR for making capital budgeting decisions that add to shareholder value?

Yes. No