What are the two projects net present values

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Problem - 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

Required -

a. What are the two projects' net present values, assuming the cost of capital is 5%? 10%? 15%?

b. What are the two projects' IRRs at these same costs of capital?

Reference no: EM132734277

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