Problem 11-6 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 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 ___%

If the WACC were 5% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 3.86%.)

Proect A/ Proect B /Neither / Both

If the WACC were 10% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 3.86%.)

Proect A/ Proect B /Neither / Both

If the WACC were 15% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 3.86%.)

Proect A/ Proect B /Neither / Both