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Your firm is considering two projects with the cash flows below. In which discount rate range will the company prefer Project A? In which discount
Your firm is considering two projects with the cash flows below. In which discount rate range will the company prefer Project A? In which discount rate range will the company prefer Project B? Hint: graph the two NPV profiles, find the crossover point (NPVA=NPVB) or the Fisher's intersection.
| Year | Project A | Project B |
| 0 | -22,500 | -50,000 |
| 1 | 8,000 | 15,000 |
| 2 | 8,000 | 15,000 |
| 3 | 8,000 | 15,000 |
| 4 | 8,000 | 15,000 |
| 5 | 8,000 | 15,000 |
| 6 | 8,000 | 15,000 |
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