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QUESTION 12 XYZ Corp has selected the Project L at DR of 8% because it has higher NPV than that of Project S. Lately Interest
QUESTION 12 XYZ Corp has selected the Project L at DR of 8% because it has higher NPV than that of Project S. Lately Interest Rates have been rising at a rate faster than expected. Assuming DR - New Interest Rate, after what Interest Rate, AKA Cross-over rate, the NPVs of the two projects would invert? X-OVER RATE PROBLEM Year 0 Project S $1.000) 500 400 Project L $1.000) 100 300 1 2 3 4 ele 300 400 100 675 According to your calculations, the Cross over Discount Pate between the above two Projecte in approximately O 0.16% b. 11% O c. 10% d. 18% O: 12% 10%
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