Question 10 5 pts Anadarko Petroleum must choose between two

Question 10 5 pts Anadarko Petroleum must choose between two mutually exclusive oil-drilling projects, which each have a cost of $12 million. Under Plan A, all oil would be extracted in one year, producing a cash flow at t-1 of $14.8 million. Under Plan B, cash flows would be $2.1 million for 20 years. The frm\'s WACC is 12%. At what rate are the NPVs for these two plans the same? That is, what is the crossover rate where the two projects\' NPVs are equal Your answer should be between 12.25 and 17.15, rounded to 2 decimal places, with no special characters D Question 11 5 pts Genesco is considering two alternative 5-year leases. The first lease is for $2.320 per month for 60 months. The second lease has no rent for the first 9 months, and then even monthly payments for the remaining 51 months. The Ps F7 F8

Solution

PV = -14.8 + 2.1 = -12.7

N = 19

PMT = 2.1

FV = 0

use rate function in Excel

cross over rate = 15.46%