QUESTION 1 Crossover rate= the IRR of the cash flows created by taking the difference of the project cash flows each year Replacement Chain NPV= compute the NPV of each project if the projects are repeated consecutively until they have the same life (length of repeated project). Equivalent Annual Annuity =Compute the NPV of each project (with the different lives). Then set this NPV equal to the PV and compute the annuity payment amount (PMT) that is equivalent to the NPV of project 1. Present Value of Cash Outflows (1 + MIRR)` = Terminal Value of Cash Inflows Steps for MIRR: Calculate the present value of all NEGATIVE cash flows 2. Calculate the future value (at the end of the project's life) of all POSITIVE cash flows. 3. Find the I/Y when N= project life, PV = PV of negative cash flows, PMT = 0, FV = FV of positive cash flows. Project A will have an initial cost of $50 and will produce a cash flow stream of $8 per year for 20 years. Project B will cost $15 initially and will produce a cash flow stream of $3.4 per year for 20 years. What is the crossover late for these two projects? 10.00% O 11.71% O 15.03% 22.25% QUESTION 1 Crossover rate= the IRR of the cash flows created by taking the difference of the project cash flows each year Replacement Chain NPV= compute the NPV of each project if the projects are repeated consecutively until they have the same life (length of repeated project). Equivalent Annual Annuity =Compute the NPV of each project (with the different lives). Then set this NPV equal to the PV and compute the annuity payment amount (PMT) that is equivalent to the NPV of project 1. Present Value of Cash Outflows (1 + MIRR)` = Terminal Value of Cash Inflows Steps for MIRR: Calculate the present value of all NEGATIVE cash flows 2. Calculate the future value (at the end of the project's life) of all POSITIVE cash flows. 3. Find the I/Y when N= project life, PV = PV of negative cash flows, PMT = 0, FV = FV of positive cash flows. Project A will have an initial cost of $50 and will produce a cash flow stream of $8 per year for 20 years. Project B will cost $15 initially and will produce a cash flow stream of $3.4 per year for 20 years. What is the crossover late for these two projects? 10.00% O 11.71% O 15.03% 22.25%