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ZZY, LLC, has identified the following two mutually exclusive projects: Year Cash Flow for A in $ Cash Flow for B in $ 0 -65,000
ZZY, LLC, has identified the following two mutually exclusive projects:
Year | Cash Flow for A in $ | Cash Flow for B in $ |
0 | -65,000 | -65,000 |
1 | 34,000 | 19,000 |
2 | 27,000 | 25,000 |
3 | 21,000 | 29,000 |
4 | 17,000 | 34,000 |
Below what discount rate is B the better project than A? (Hint: You need to find the crossover rate).
Answer in percent to two decimals.
Option A: 16.31 |
Option B: 21.01 |
Option C: 22.23 |
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