Question: 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
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 flow of $6.39 million per year for 20 years, Plan requires a $15 million expenditure to build a somewhat less efficient, more labor intensive plant with an expected cash flow of $1.6 million per year for 20 years. The firm's WACC is 11%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analys to answer the question below Open spreadsheet a. 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 110.550,000 should be entered as 10.55 Plan AS million Plants million Calculate each project's TRR. Round your answer to two decimal places Pan A Plan : ty graphing the NPV profiles for Plan A and Man, proximate the crossover rute to the nearest percent Calculate the crossover rate where the two projecte NPVs are equal Hound your answer to two decimal places
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