Assume that the risk-adjusted cost of capital for both projects is 13%. The two mutually exclusive projects have the following cash flows:

Time	Project C	Project D
0	-$40,000	-$40,000
1	$25,800	$2,600
2	$12,600	$8,400
3	$8,400	$18,200
4	$6,300	$32,200

What is the crossover rate (crossover point) for the two projects?

Group of answer choices

16.88%

14.04%

10.85%

12.66%

_______

Using the information from Problem 3, which of the following two statements is correct?

S1: Based on the IRR rule, the firm should choose Project C, since its IRR of 16.77% is higher than the IRR of Project D.

S2: Based on the NPV rule, the firm should choose Project C, since its NPV of $2,385.04 is positive and higher than the NPV of Project D.

Group of answer choices

S2 is correct but S1 is false

Both statements are false

Both statements are correct

S1 is correct but S2 if false