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Suppose the two projects described below are mutually exclusive and the company is not practicing capital rationing. What is the hurdle rate that will render
Suppose the two projects described below are mutually exclusive and the company is not practicing capital rationing. What is the hurdle rate that will render them equivalent to each other from the perspective the investors? Round your answer to 1% and enter your answer as a percentage. E.g., if your answer is 5%, enter 5.
Year | 0 | 1 | 2 | 3 | 4 | 5 |
Project A | -1000 | 100 | 200 | 350 | 500 | 550 |
Project B | -1000 | 500 | 450 | 300 | 200 | 100 |
Note: I do not have access to excel. Please do not use excel to answer this question. Please and thank you.
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