Question
Use the following mutually exclusive investment cash flows for the question(s) below: Project Year 0 Year 1 Year 2 Year 3 A -$200 $100 $100
Use the following mutually exclusive investment cash flows for the question(s) below:
| Project | Year 0 | Year 1 | Year 2 | Year 3 |
| A | -$200 | $100 | $100 | $100 |
| B | -275 | $125 | $125 | $125 |
Compute the crossover rate for the two projects.
| The NPV profiles of the two do not cross over | ||
| 3.5% | ||
| 0.0% | ||
| 2.2% | ||
| 8.7% |
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Essentials Of Corporate Finance
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan
9th International Edition
1259254801, 9781259254802
