# A company is considering two mutually exclusive expansion plans. Plan A requires a $41 million expenditure... ###### Question: A company is considering two mutually exclusive expansion plans. Plan A requires a$41 million expenditure on a large-scale integrated plant that would provide expected cash flows of $6.55 million per year for 20 years. Plan B requires a$11 million expenditure to build a somewhat less efficient, more labor-intensive plant with an expected cash flow of $2.47 million per year for 20 years. The firm's WACC is 9%. 1. Calculate each project's NPV. Enter your answers in millions. For example, an answer of$10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places.

Plan A:     $million Plan B:$   million

Plan A:       %

Plan B:       %

2. By graphing the NPV profiles for Plan A and Plan B, determine the crossover rate. Round your answer to the nearest whole number.
%
3. Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to one decimal place.
%
4. Is NPV better than IRR for making capital budgeting decisions that add to shareholder value?
-Select- ( yes or no)

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