Estimate that the investments will produce net cash flows

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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

A) What are the two projects' net present values, assuming the cost of capital is 5%? 10%? 15%? (Please include formulas or the Excel function used to calculate)

B) What are the two project's IRRs at the same cost of capital (Please include formulas, or the Excel function used to calculate)

Reference no: EM13933389

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