• Part 2:

• NPV

  Your division is considering two projects with the following cash flows (in millions):

  0

  1

  2

  3

  Project A	-$20	$5	$9	$12
  Project B	-$13	$8	$7	$3

  What are the projects' IRRs assuming the WACC is 5%? Round your answer to two decimal places. Do not round your intermediate calculations. Project A % Project B %

  What are the projects' IRRs assuming the WACC is 10%? Round your answer to two decimal places. Do not round your intermediate calculations. Project A % Project B %

  What are the projects' IRRs assuming the WACC is 15%? Round your answer to two decimal places. Do not round your intermediate calculations. Project A % Project B %

Part 2:

IRR AND NPV

A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:

0

1

2

3

4

Project S	-$1,000	$890.09	$260	$5	$5
Project L	-$1,000	$5	$240	$420	$799.69

The company's WACC is 8.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.