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Information Use the following for Questions 1 - 5: You are considering two mutually exclusive projects, A and B. Project A costs $100,000 and generates
Information Use the following for Questions 1 - 5: You are considering two mutually exclusive projects, A and B. Project A costs $100,000 and generates cash flows of $15,000 for 10 years. Project B costs $95,000 and generates cash flows of $4,000 for eight years and then a cash flow of $130,000 for one year. Report rates in percentage form to two decimal places i.e. 10.03% not 10% Question 1 (3 points) Calculate what discount rate would make you indifferent between choosing one project or another. i.e. what discount rate produces the same NPV for both projects? A Question 2 (1 point) Which project would you ACCEPT if your discount rate was 1%? A) Project A B) Project B C) Both Project A and B D) Neither Project A or B Question 3 (1 point) Which project would you ACCEPT if your discount rate was 5%? A) Project A B) Project B C) Both Project A and B D) Neither Project A or B Question 4 (1 point) Which project would you ACCEPT if your discount rate was 10%? A) Project A B) Project B C) Both Project A and B D) Neither Project A or B Question 5 (2 points) What is the highest discount rate in which you can still produce a non-negative NPV for at least one project? A Question 6 (1 point) An INDEPENDENT project costs $2,500,000 and will return cash flows of $1,200,000 for 3 years and $160,000 for the 3 years after that. In the seventh year, you will need to upgrade the equipment at a net cost of $1,600,000 (
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