Task: Your division is considering two projects with the following net cash flows:
Year Project A Project B
0 (25) (20)
1 5 10
2 10 9
3 17 6
Q1) What are the projects' NPVs, assuming the WACC is 5 percent? 10 percent? 15 percent?
Q2) What are the project' IRRs each of these WACCs?
Q3) If the WACC were 5 percent and A and B were mutually exclusive, which would you choose? What if the WACC were 10 percent? 15 percent?