Question: XYZ company must pick between two mutually exclusive extraction projects, and each costs $12.6 million. Under Plan A, all the oil would be extracted in
XYZ company must pick between two mutually exclusive extraction projects, and each costs $12.6 million. Under Plan A, all the oil would be extracted in 1 year, producing a cash flow at t = 1 of $15.12 million. Under Plan B, cash flows would be $2.2389 million per year for 20 years. The firm's WACC is 12%.
1. Construct NPV profiles for Plans A and B. Round your answers to two decimal places. Do not round your intermediate calculations. Enter your answers in millions.
Discount Rate NPV Plan A NPV Plan B
0%
5%
10%
12%
15%
17%
20%
***If there is a way to do these problem on a ti-84, that would help out a lot***
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