NPV Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$20 $5 $9 $12 Project B -$13 $8 $7 $3 What are...

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Finance

NPV
Your division is considering two projects with the followingcash flows (in millions):
0 1 2 3
Project A -$20 $5 $9 $12
Project B -$13 $8 $7 $3

What are the projects' NPVs assuming the WACC is 5%? Round youranswer to two decimal places. Enter your answer in millions. Forexample, an answer of $10,550,000 should be entered as 10.55.
Project A    $   million
Project B    $   million
What are the projects' NPVs assuming the WACC is 10%? Round youranswer to two decimal places. Enter your answer in millions. Forexample, an answer of $10,550,000 should be entered as 10.55.
Project A    $   million
Project B    $   million
What are the projects' NPVs assuming the WACC is 15%? Round youranswer to two decimal places. Enter your answer in millions. Forexample, an answer of $10,550,000 should be entered as 10.55.
Project A    $   million
Project B    $   million
What are the projects' IRRs assuming the WACC is 5%? Round youranswer to two decimal places.
Project A   %
Project B   %
What are the projects' IRRs assuming the WACC is 10%? Round youranswer to two decimal places.
Project A   %
Project B   %
What are the projects' IRRs assuming the WACC is 15%? Round youranswer to two decimal places.
Project A   %
Project B   %

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4.4 Ratings (896 Votes)

a Project A Discount rate 5000 Year 0 1 2 3 Cash flow stream 20 5 9 12 Discounting factor 1000 1050 1103 1158 Discounted cash flows project 20000 4762 8163 10366 NPV Sum of discounted cash flows NPV Project A 329 Where Discounting factor 1 discount rateCorresponding period in years Discounted Cashflow Cash flow streamdiscounting factor Project B Discount rate 5000 Year 0 1 2 3 Cash flow stream 13 8 7 3 Discounting factor 1000 1050 1103 1158 Discounted cash flows project 13000 7619 6349 2592 NPV Sum of discounted cash flows NPV Project B 356 Where See Answer

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Transcribed Image Text

NPVYour division is considering two projects with the followingcash flows (in millions):0123Project A-$20$5$9$12Project B-$13$8$7$3What are the projects' NPVs assuming the WACC is 5%? Round youranswer to two decimal places. Enter your answer in millions. Forexample, an answer of $10,550,000 should be entered as 10.55.Project A $ millionProject B $ millionWhat are the projects' NPVs assuming the WACC is 10%? Round youranswer to two decimal places. Enter your answer in millions. Forexample, an answer of $10,550,000 should be entered as 10.55.Project A $ millionProject B $ millionWhat are the projects' NPVs assuming the WACC is 15%? Round youranswer to two decimal places. Enter your answer in millions. Forexample, an answer of $10,550,000 should be entered as 10.55.Project A $ millionProject B $ millionWhat are the projects' IRRs assuming the WACC is 5%? Round youranswer to two decimal places.Project A %Project B %What are the projects' IRRs assuming the WACC is 10%? Round youranswer to two decimal places.Project A %Project B %What are the projects' IRRs assuming the WACC is 15%? Round youranswer to two decimal places.Project A %Project B %

Project A	-$20	$5	$9	$12
Project B	-$13	$8	$7	$3