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Assume you are considering two investments A and B on the following cash flows: Year Today 1 2 3 4 Cash Flow A B -10000
Assume you are considering two investments A and B on the following cash flows: Year Today 1 2 3 4 Cash Flow A B -10000 -10000 120 o 150 100 1000 500 850 600 950 1200 1050 1200 1000 1100 900 1000 900 1100 1000 1500 5 6 7 8 9 10 At what cost of capital does your preference for one investment change to the other investment? Present your answer in percentage to 2 decimal places (including the % symbol), e.g. 2.34% for a positive rate, or -1.23% for a negative rate (25% marks will be deducted if the % symbol is not provided)
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