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(2 points) You have a choice between two mutually exclusive investments. If you require a 14% return, at what rate of return would you be
(2 points) You have a choice between two mutually exclusive investments. If you require a 14% return, at what rate of return would you be indifferent between the two investments?
| A | B |
| ||||
| Year | Cash Flow | Cash Flow |
| |||
| 0 | -$150,000 | -$120,000 |
| |||
| 1 | 50,000 | 72,000 |
| |||
| 2 | 90,000 | 50,000 |
| |||
| 3 | 70,000 | 40,000 |
| |||
A) 14.00%
B) 15.98%
C) 17.85%
D) 18.74%
E) None of the above
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