Question
Gardial Fisheries is considering two mutually exclusive investments. The projects' expected net cash flows are as follows: Expected Net Cash Flows Time Project A Project
Gardial Fisheries is considering two mutually exclusive investments. The projects' expected net cash flows are as follows:
| Expected Net Cash Flows | ||
| Time | Project A | Project B |
| 0 | (375) | (575) |
| 1 | (300) | 190 |
| 2 | (200) | 190 |
| 3 | (100) | 190 |
| 4 | 600 | 190 |
| 5 | 600 | 190 |
| 6 | 926 | 190 |
| 7 | (200) | 0 |
What is the crossover point and If the cost of capital is 12% which project should be selected?
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The Option Trader Handbook
Authors: George Jabbour
2nd Edition
0470481617, 978-0470481615
