Question

Given the following cash flows for a two mutually exclusive projects (A&B) and assuming 16% cost...

Given the following cash flows for a two mutually exclusive projects (A&B) and assuming 16% cost of capital;

year Project A Project B
0 -5000 -1000
1 2500 600
2 2500 600
3 2500 600

2) At what rate would you be indifferent between those two mutually exclusive projects?

20.04%

23.38%

1.35%

1.12%

36.31%

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