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McConachie Company is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. Year
McConachie Company is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. Year CFs CFL 0 -$1,000 -$2,000 $420 $850 $420 $850 3 $420 $850 a. What is the crossover rate? b. If the WACC is 10%, What are the projects NPVs? Which project should the company invest in? c. If the decision is made based on MIRR, which project should the company invest in
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