A company is considering two mutually exclusive expansion plans. Plan A requires a $40 million expenditure on a large-scale integrated plant that would provide expected cash flows of $6.39 million per year for 20 years. Plan B requires a $11 million expenditure to build a somewhat less efficient, more labor-intensive plant with an expected cash flow of $2.47 million per year for 20 years. The firm's WACC is 9%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

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

   Plan A: $ _____million

   Plan B: $ _____ million

   Calculate each project's IRR. Round your answer to two decimal places.

   Plan A: ______%

   Plan B: ______%

2. By graphing the NPV profiles for Plan A and Plan B, approximate the crossover rate to the nearest percent.

   ______%

3. Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to two decimal places.

   ______%

H 6 -S40.00 $6.39 6 $6.39 S6.39 S6.39 $6.39 $6.39 $8.39 $6.39 $6.39 N S6.39 $6.39 $ O $5.39 $6.39 $6.39 56.39 $6.39 W $6.39 S6.39 $8.39 $ $6.39 Plan A 7 8 8 Plan B B -$11.00 52.47 $2.47 52.47 52.47 S2.47 52.47 52.47 $2.47 $2.47 $2.47 52.47 52.47 $2.47 $2.47 S247 $2.47 52.47 52.47 52.47 52.47 Formulas WNIA #N/A #N/A UNIA NPVA $0.00 $0.00 $0.00 $0.00 $0.00 50.00 $0.00 S0.00 NPV Profiles 10 Project NPV Calculations: 11 NPVA 12 NFV. : 13 14 Project IRR Calculations: 15 IRRA 16 IRRE F 17 18 NPV Profiles: 19 Discount Rales NPVA 20 $0.00 21 OS $0.00 22 5% $0.00 32 10% $0.00 24 1554 $0.00 25 20% $0.00 26 229 $0.00 27 25% $0.00 28 29 30 31 512 32 $0.90 33 $0.80 34 $0.70 25 $0.00 36 59.50 37 $0.40 38 $ 39 59.10 40 59 20 41 $0.10 12 SEX 43 5 44 45 Calculation of Crossover Rate: : 46 47 Plan A 48 49 Plan B B 50 51 Project Delta 52 Formulas 53 54 55 Crossover Rate = IRRA 108 155 UN 22% 25% 4 0 -S40.00 1 S6.39 2 $6.39 3 55 5: 5 6 7 S6.39 $a 39 38 39 8 $6.39 9 9 $6.39 10 $8.39 11 S6.39 12 SB.SE 13 $6.39 15 $8.39 16 $6.39 17 $8.39 10 55,57 19 S6.39 20 $3 19 $8.39 $6.39 -$11.00 S2.47 $2.47 S2.47 $2.47 S2.47 $2.47 $2.47 $2.47 $2.47 $2.47 S2.47 $2.47 $2.47 $2.47 S2.47 $2.47 S2.47 S247 52.47 $2.47 #NIA #NA #NA #NIA NA NA NA NA NA NA NA # #N #N #N/A #NA #NA #NA #NA #NANIA NA #NA #N/A # # # N Formula UNIA