NPV PROFILES: TIMING DIFFERENCES
An oil-drilling company must choose between two mutuallyexclusive extraction projects, and each costs $11.8 million. UnderPlan A, all the oil would be extracted in 1 year, producing a cashflow at t = 1 of $14.16 million. Under Plan B, cash flows would be$2.0967 million per year for 20 years. The firm's WACC is 12%.
- Construct NPV profiles for Plans A and B. Round your answers totwo decimal places. Do not round your intermediate calculations.Enter your answers in millions. For example, an answer of$10,550,000 should be entered as 10.55. If an amount is zero enter\"0\". Negative value should be indicated by a minus sign.
| Discount Rate | NPV Plan A | NPV Plan B |
| 0% | $ million | $ million |
| 5 | million | million |
| 10 | million | million |
| 12 | million | million |
| 15 | million | million |
| 17 | million | million |
| 20 | million | million |
Identify each project's IRR. Round your answers to two decimalplaces. Do not round your intermediate calculations.
Project A %
Project B %
Find the crossover rate. Round your answer to two decimal places.Do not round your intermediate calculations.
%
