Consider the following projects with a cost of capital = 14%:

Year Project M Project T?

0 -$250,000 -$320,000

1 150,000 110,000

2 100,000 150,000

3 70,000 170,000

At what cost of capital would a firm be indifferent between the two projects based on their NPVs?

What is this WACC rate called? What is the relevant range of discount rates where you would

accept project M and at what discount rates would project T be accepted if they are mutually

exclusive?