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Two projects being considered are mutually exclusive and have the following projected after-tax cash flows: Year Project A Project B 0-$50,000 -$50,000 1 0 15,625

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Two projects being considered are mutually exclusive and have the following projected after-tax cash flows: Year Project A Project B 0-$50,000 -$50,000 1 0 15,625 2 0 15,625 3 0 15,625 4 0 15,625 5 100,000 15,625 Calculate the crossover rate, i.e., the interest rate at which the NPVs would be equal. State a complete set of decision rules about which should be chosen and why. 7. Assuming no arbitrage opportunities exist, fill in all of the exchange rates in the table below: Euro Price of U.S. Dollar British Pound Japanese Yen $1 $1.122 $1.301 1 U.S. Dollar Euro British Pound Japanese Yen 1 124.75 Y1

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