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NPV profile of two mutually exclusive projects. Moulton Industries has two potential projects for the coming year, Project B-12 and Project F-4. The two projects
NPV profile of two mutually exclusive projects. Moulton Industries has two potential projects for the coming year, Project B-12 and Project F-4. The two projects are mutually exclusive. The cash flows are listed in the following table. Draw the NPV profile of each project, and determine their crossover rate. If the appropriate hurdle rate is 8% for both projects, which project does Moulton industries choose? Project B-12 - $4,300,000 $2,000,000 $2,000,000 $2,000,000 $0 S0 Project F-4 - $3,790,000 $0 $1,050,000 $1,430,000 $2,100,000 $2,430,000 ash Flow Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 What is the crossover rate of the two projects? % (Round to two decimal places.)
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