Question
Consider the two Projects A and B with the below Cash flows in $ :: year CF for project A CF for project B 0
Consider the two Projects A and B with the below Cash flows in $ ::
| year | CF for project A | CF for project B |
| 0 | -800 | -1000 |
| 1 | 200 | 300 |
| 2 | 300 | 300 |
| 3 | 300 | 350 |
| 4 | 300 | 400 |
| 5 | 350 | 400 |
| 6 | 350 | 400 |
A) Draw the NPV profiles for the two Projects;
B) Find the crossover rate.
C) If they are mutually exclusive projects, which project would you accept, Project A or B?
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International Finance
Authors: Keith Pilbeam
5th Edition
1350347094, 978-1350347090
