Question

Projects A and B are mutually exclusive and both have an initial cost of $88,000. Project A has annual cash flows for three years of $18,300, $34,500, and $52,300, respectively. Project B has annual cash flows for three years of $26,400, $30,900, and $43,700. What is the crossover rate?

Select one:

a.

27.63 percent

b.

25.30 percent

c.

18.32 percent

d.

13.33 percent

e.

9.74 percent

Answer 1