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Swensons is considering two mutually exclusive projects, Projects A and B, and has determined that the crossover rate for these projects is 11.7 percent. Given
Swensons is considering two mutually exclusive projects, Projects A and B, and has determined that the crossover rate for these projects is 11.7 percent. Given this you know that:
Neither project will be accepted if the discount rate is less than 11.7 percent. | |||
Both projects have a negative NPV at discounts rates greater than 11.7 percent. | |||
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Both projects have a zero NPV at a discount rate of 11.7 percent. | |||
The project that is preferred at a discount rate of 11 percent will be the opposite project of that preferred at a discount rate of 12 percent. |
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