Anderson Associates is considering two mutually exclusive projects that have the following cash flows: Project AProject B
Fantastic news! We've Found the answer you've been seeking!
Question:
Anderson Associates is considering two mutually exclusive projects that have the following cash flows:
Project AProject B
YearCash FlowCash Flow
0-$10,000-$8,000
11,0007,000
22,0003,000
36,0001,000
48,0003,000
At what cost of capital do the two projects have the same net present value? (That is, what is the crossover rate?)Enter your answer rounded to two decimal places.Do not enter % in the answer box.For example, if your answer is 0.12345 or 12.345% then enter as 12.35 in the answer box.
Expert Answer:
Posted Date:
