Problem 11-6 NPV

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

0

1

2

3

Project A	-$17	$8	$8	$3
Project B	-$26	$13	$10	$9

What are the projects' NPVs assuming the WACC is 5%? Round your answer to two decimal places. (fill in the blank space) Project A $____ million Project B $____ million

What are the projects' NPVs assuming the WACC is 10%? Round your answer to two decimal places. Project A $____ million Project B $____ million

What are the projects' NPVs assuming the WACC is 15%? Round your answer to two decimal places. Project A $____ million Project B $____ million

What are the projects' IRRs assuming the WACC is 5%? Round your answer to two decimal places. Project A ____% Project B ____%

What are the projects' IRRs assuming the WACC is 10%? Round your answer to two decimal places. Project A ____% Project B ____%

What are the projects' IRRs assuming the WACC is 15%? Round your answer to two decimal places. 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 20.19%.) (select multiple choice) a.Project A

b.Project B

b.Neither A, nor B

If the WACC were 10% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 20.19%.) (select multiple choice)

a.Project A

b.Project B

b.Neither A, nor B

If the WACC were 15% and A and B were mutually exclusive, which would you choose? (Hint: The crossover rate is 20.19%.) (select multiple choice)

a.Project A

b.Project B

b.Neither A, nor B