Assignment:
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
|
What are the two projects’ net present values, assuming the cost of capital is 10 percent? 5 percent? 15 percent?
Provide complete and step by step solution for the question and show calculations and use formulas.