Projects irrs at these same costs of capital

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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%?

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

Reference no: EM131508927

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