Question: Your division is considering two projects with the following cash flows (in millions): a. What are the projects' NPVs assuming the WACC is 5%? 10%?

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

a. What are the projects' NPVs assuming the WACC is 5%? 10%? 15%?
b. What are the projects' IRRs at each of these WACCs?
c. If the WACC was 5% and A and B were mutually exclusive, which project would you choose? What if the WACC was 10%? 15%? (Hint: The crossover rate is 7.81%.)

2 Project A Project B20 $5 $10 $10 $9 $17 $6 -$25

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