Question

You are considering the following two mutually exclusive projects. The crossover rate between these two projects...

You are 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 −$21,000 −$21,000
1 7,000 15,040
2 7,000 5,000
3 15,000 7,060

Multiple Choice

  • 12.59%; B

  • 15.61%; A

  • 15.61%; B

  • 12.59%; A

  • 16.70%; A

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