Qusetion: Your division is considering two investment projects, each of which requires an up-front expenditure of $19 million. You estimate that the investments will produce the following net cash flows:
| Year |
Project A |
Project B |
| 1 |
$ 4,000,000 |
$20,000,000 |
| 2 |
10,000,000 |
10,000,000 |
| 3 |
20,000,000 |
7,000,000 |
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 %