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6. NPV Your division is considering two projects with the following cash flows (

ID: 2343702 • Letter: 6

Question

6. NPV

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

0 1 2 3
Project A -$11 $4 $7 $1
Project B -$20 $12 $5 $9



a.What are the projects' NPVs assuming the WACC is 5%? Round your answer to two decimal places.
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

b.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 %

Explanation / Answer

a.What are the projects' NPVs assuming the WACC is 5%? Round your answer to two decimal places. Project A $ million : $0.02 Project B $ million : $3.74 What are the projects' NPVs assuming the WACC is 10%? Round your answer to two decimal places. Project A $ million : -$0.83 Project B $ million : $1.80 What are the projects' NPVs assuming the WACC is 15%? Round your answer to two decimal places. Project A $ million : -$1.57 Project B $ million : $0.13 b.What are the projects' IRRs assuming the WACC is 5%? Round your answer to two decimal places. Project A % :5.12% Project B % : 15.43% What are the projects' IRRs assuming the WACC is 10%? Round your answer to two decimal places. Project A % :5.12% Project B % : 15.43% What are the projects' IRRs assuming the WACC is 15%? Round your answer to two decimal places. Project A % :5.12% Project B % : 15.43%

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