Hodgkiss Enterprises has gathered projected cash flows

for two projects. At what interest rate would the company be indifferent

between the two projects? Which project is better if the required return is

above this interest rate? Why?

Year Project I Project J

0 $172,000 $172,000

1 83,200 60,000

2 74,400 68,800

3 63,200 76,800

4 57,800 84,000