Question

NPV

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

0

1

2

3

Project A	-$16	$7	$9	$10
Project B	-$26	$14	$20	$11

1. What are the projects' NPVs assuming the WACC is 5%? Round your answer to two decimal places. Do not round your intermediate calculations. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
   Project A    $    million
   Project B    $    million

   What are the projects' NPVs assuming the WACC is 10%? Round your answer to two decimal places. Do not round your intermediate calculations. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
   Project A    $    million
   Project B    $    million

   What are the projects' NPVs assuming the WACC is 15%? Round your answer to two decimal places. Do not round your intermediate calculations. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
   Project A    $    million
   Project B    $    million

2. What are the projects' IRRs assuming the WACC is 5%? 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 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   %

Answer 1

B8 A AwN- Year 3 L 4 0 $ - 1 $ 2 $ 7 3 $ 8 IRR - X V fix =IRR(B4:07) B C D E F G H I J K L Cashflows PVE Discounted cash flows A Discounted cash flows B Y PVIF@5% PVIF@10% PVIF@15% PVIF@5% PVIF@10% PVIF@15% PVIF@5% PVIF@10% PVIF@15% A B C D EL AⓇC AⓇD AⓇE BC B x D BXE (16) $ (26) 1.000 1.000 1.000 $ (16.00) $ (16.00) $ (16.00) $ (26.00) $_(26.00) $ (26.00) 7§ 14 | 0.952 0.909 0.870 $ 6.67 $ 6.36 $ 6.09 $ 13.33 $ 12.73 $ 12.17 9 $ 20 0.907 0.826 0.756 $ 8.16 $ 7.44 $ 6.81 $ 18.14 $ 16.53 $ 15.12 10 $ 11 0.864 0.751 0.658 $ 8.64 $ 7.51 $ 6.58 $ 9.50 $ 8.26 $ 7.23 | 26.89% 34.46% Net present value $7.47 $5.31 $3.47 $14.98 $11.52 $8.53 At WACC 5% At WACC 5% 10 11 a) 12 13 Project A Project B $ 7.47 $ 14.98 Project A Project B 26.89% 34.46% At WACC 10% Project A Project B $ $ 5.31 11.52 At WACC 10% Project A Project B 26.89% 34.46% At WACC 15% Project A Project B $ $ 3.47 8.53 At WACC 15% Project A Project B 26.89% 34.46% At WACC 5%, select Project B At WACC 10%, select Project B At WACC 15%, select Project B

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