this is homework and is past due, can not seem to be able to do, need today
Question # 00233897
Posted By:
Updated on: 03/31/2016 12:17 PM Due on: 03/29/2016
10-7 – NPV
Your division is considering two investment projects, each of which requires an
up-front expenditure of $15 million. You estimate that the investments will
produce the following net cash flows:
YEAR PROJECT
A PROJECT B
1 $ 5,000,000 $20,000,000
2 10,000,000 10,000,000
3 20,000,000 6,000,000
What are the two projects' net present values, assuming the cost of capital is:
a) 5%?
b) 10%?
c) 15%?What are the two project’s IRRs at the same cost of capital?
-
Rating:
/5
Solution: Your division is considering two investment projects