Your division is considering two investment projects, each of which requires an up-front expenditure of $23 million. You estimate that the investments will produce the following net cash flows: Year
Year Project A Project B
1 $ 6,000,000 $20,000,000
2 10,000,000 10,000,000
3 20,000,000 8,000,000
What are the two projects' net present values, assuming the cost of capital is 5%? Round your answers to the nearest dollar.
Project A $ Project B $
What are the two projects' net present values, assuming the cost of capital is 10%? Round your answers to the nearest dollar.
Project A $ Project B $
What are the two projects' net present values, assuming the cost of capital is 15%? Round your answers to the nearest dollar.
Project A $ Project B $
What are the two projects' IRRs at these same costs of capital? Round your answers to two decimal places.
Project A % Project B %