Division Alex is considering two facility investment projects, each of which requires an up-front expenditure of $15 million. Alex estimates that the investments will produce the following net cash flows:
Year
1 2 3
Project Jared
$6,000,000.00 $10,000,000.00 $19,000,000.00
Project TJ
$18,000,000.00 $10,000,000.00 $4,000,000.00
1. What are the projects' net present values, assuming the cost of capital is 5%?
2. What are the projects' net present values, assuming the cost of capital is 10%?
3. What are the projects' net present values, assuming the cost of capital is 15%?
(Use Excel)