Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A Project B -$31 $7 $12 $22 -$19 $13 $6 $5 a. What are the projects' NPVs assuming the WACC is 5%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ million Project B: $ million What are the projects' NPVs assuming the WACC is 10%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ Project B: $ million million What are the projects' NPVs assuming the WACC is 15%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ Project B: $ million million b. What are the projects' IRRS assuming the WACC is 5%? Do not round intermediate calculations. Round your answer to two decimal places. Project A: % Project B: % What are the projects' IRRS assuming the WACC is 10%? Do not round intermediate calculations. Round your answer to two decimal places. Project A: Project B: % % What are the projects' IRRS assuming the WACC is 15%? Do not round intermediate calculations. Round your answer to two decimal places. Project A: Project B: % % c. If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 10.72%.) -Select- If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 10.72%.) -Select- If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 10.72%.) -Select-
Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A Project B -$31 $7 $12 $22 -$19 $13 $6 $5 a. What are the projects' NPVs assuming the WACC is 5%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ million Project B: $ million What are the projects' NPVs assuming the WACC is 10%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ Project B: $ million million What are the projects' NPVs assuming the WACC is 15%? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places. Project A: $ Project B: $ million million b. What are the projects' IRRS assuming the WACC is 5%? Do not round intermediate calculations. Round your answer to two decimal places. Project A: % Project B: % What are the projects' IRRS assuming the WACC is 10%? Do not round intermediate calculations. Round your answer to two decimal places. Project A: Project B: % % What are the projects' IRRS assuming the WACC is 15%? Do not round intermediate calculations. Round your answer to two decimal places. Project A: Project B: % % c. If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 10.72%.) -Select- If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 10.72%.) -Select- If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 10.72%.) -Select-
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
100%
Transcribed Image Text:Your division is considering two projects with the following cash flows (in millions):
0
1
2
3
Project A
Project B
-$31
$7
$12
$22
-$19
$13
$6
$5
a. What are the projects' NPVs assuming the WACC is 5%? Enter your answer in millions. For example, an answer of $10,550,000 should be
entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to
two decimal places.
Project A: $
million
Project B: $
million
What are the projects' NPVs assuming the WACC is 10%? Enter your answer in millions. For example, an answer of $10,550,000 should be
entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to
two decimal places.
Project A: $
Project B: $
million
million
What are the projects' NPVs assuming the WACC is 15%? Enter your answer in millions. For example, an answer of $10,550,000 should be
entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to
two decimal places.
Project A: $
Project B: $
million
million
b. What are the projects' IRRS assuming the WACC is 5%? Do not round intermediate calculations. Round your answer to two decimal places.
Project A:
%
Project B:
%
What are the projects' IRRS assuming the WACC is 10%? Do not round intermediate calculations. Round your answer to two decimal places.
Project A:
Project B:
%
%
What are the projects' IRRS assuming the WACC is 15%? Do not round intermediate calculations. Round your answer to two decimal places.
Project A:
Project B:
%
%
c. If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 10.72%.)
-Select-
If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 10.72%.)
-Select-
If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 10.72%.)
-Select-
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