Question

Acme Inc. is considering the following two mutually exclusive projects with a WACC of 11%. At...

Acme Inc. is considering the following two mutually exclusive projects with a WACC of 11%. At what interest rate will the two projects have the same net present value (what’s the crossover rate)?

Year

Coyote Rockets

Rocket-Powered Roller Blades
0

-500

-1000
1

250

350
2

350

600
3

400

700
Business   Accounting   
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