Question
McCarver Inc. is considering the following mutually exclusive projects: Project A Project B Year Cash Flow Cash Flow 0 $5,000 $5,000 1 400 4,000 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 | 400 | 4,000 |
| 2 | 600 | 1,900 |
| 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?) Round it to one decimal place in percentage, e.g., 10.5.
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Property Finance
Authors: David Isaac
2nd Edition
0333987144, 978-0333987148
