Question
Burn Co. is considering two mutually exclusive projects, Project A and Project B. The projects have the following cash flows: YEAR A- CASH FLOW B-
Burn Co. is considering two mutually exclusive projects, Project A and Project B. The projects have the following cash flows:
| YEAR | A- CASH FLOW | B- CASH FLOW |
| 0 | (100000) | (190000) |
| 1 | 30,000 | 30000 |
| 2 | 35,000 | 35000 |
| 3 | 40,000 | 100000 |
| 4 | 40,000 | 100000 |
The two projects are equally risky. AT WHAT WEIGHTED AVERAGE COST OF CAPITAL WOULD THE TWO PROJECTS HAVE THE SAME NET PRESENT VALUE (NPV) ANSWER IN PERCENTAGE. ROUND 2 DECIMAL PLACES.
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Modern Management Concepts And Skills
Authors: Samuel Certo, S Certo
15th global Edition
978-1292265193, 1292265191
