Question
Calculate the cross-over rate for the previous question. Then calculate NPV for 2 rates higher than the cross-over rate and 2 rates lower than the
Calculate the cross-over rate for the previous question.
Then calculate NPV for 2 rates higher than the cross-over rate and 2 rates lower than the cross-over rate.
What can you conclude? SHOW YOUR WORK, EXPLAIN YOUR REASONING
| Year | Cash inflows | |
| Project A | Project B | |
| 1 | $55,000 | $95,000 |
| 2 | $55,000 | $70,000 |
| 3 | $55,000 | $40,000 |
| 4 | $55,000 | $40,000 |
| 5 | $55,000 | $20,000 |
| 6 | $55,000 | $20,000 |
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Financial Management
Authors: Rob Quail, Ricardo J. Rodriguez
2nd Edition
1557868441, 9781557868442
