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A firm is considering two mutually exclusive, conventional projects: A & B. It has determined that the crossover rate for these projects is 11.7%. Project
A firm is considering two mutually exclusive, conventional projects: A & B. It has determined that the crossover rate for these projects is 11.7%. Project A has an IRR of 15.3% and Project B has an IRR of 16.5%. Given that the firms required rate of return is 10%, which one of the following statements is most correct?
Answer given is: Project A should be accepted be it has a higher NPV at 10% than Project B
Question: How do you calculate NPV from the above information to make this determination?
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