Question

Dominic Walls, the infamous investor, is considering the following two mutually exclusive projects. The crossover rate between these two projects is ___ percent and Project ___ should be accepted if the required return is greater than the crossover rate.

Year	Project A			Project B
0		−$42,000			−$42,000
1		21,500			13,750
2		13,500			11,500
3		13,500			25,900

rev: 05_02_2019_QC_CS-167236, 09_25_2019_QC_CS-182411, 09_27_2019_QC_CS-182208

Multiple Choice

• 8.29%; B

• 9.35%; B

• 14.24%; A

• 14.24%; B

• 8.29%; A

Answer 1