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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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