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Please help me with this finance question. I dont really know how to do it. Thank You so much~!!! You are considering two mutually exclusive
Please help me with this finance question. I dont really know how to do it. Thank You so much~!!!
You are considering two mutually exclusive projects with the following cash flows: Initial $(7,500) $(6,000) Investment Year 1 7,000 1,000 Year 2 1,000 1,000 Year 3 1,000 1,000 Year 4 1,000 1,000 Year 5 1,000 7,000 What is the net present value of Project A using 15% discount rate? $930 O $1,070 $1,740 O $3,500 O $16,070 Compute the IRR of Project B. O 14.3% O 15.4% O 16.7% O 24.9% O 83% Compute the crossover rate between the two projects. O -5.2% O 0% O 8.2% O 16.7% 24.1% Which project should you take? OA always because its IRR is greater than B's OA if the discount rate is less than the crossover rate, otherwise B OA if the discount rate is between the crossover rate and A's IRR, B if the discount rate is less than the crossover rate OA if the discount rate is greater than the crossover rate, otherwise B OA if the discount rate is less than crossover rate, B ifthe discount rate is between the crossover rate and B's IRStep by Step Solution
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