Question
McCarver Inc. is considering the following mutually exclusive projects: Project A Project B Year Cash Flow Cash Flow 0 -$5,000 -$5,000 1 200 3,000 2
McCarver Inc. is considering the following mutually exclusive projects:
|
| Project A | Project B |
| Year | Cash Flow | Cash Flow |
| 0 | -$5,000 | -$5,000 |
| 1 | 200 | 3,000 |
| 2 | 800 | 3,000 |
| 3 | 3,000 | 800 |
| 4 | 5,000 | 200 |
At what cost of capital will the net present value of the two projects be the same? (That is, what is the "crossover" rate?) (3 points)
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Money, Banking And Financial Markets
Authors: Stephen G. Cecchetti, Kermit L. Schoenholtz
3rd Global Edition
1259071197, 9781259071195
