# Question

Given the following:

Project A: CF0 = –$23,000; CF1 = $6,000; CF2 = $9,000; CF3 = $15,600

Project B: CF0 = –$20,000; CF1 = $4,000; CF2 = $8,000; CF3 = $15,000

What is the crossover rate (r)?

Project A: CF0 = –$23,000; CF1 = $6,000; CF2 = $9,000; CF3 = $15,600

Project B: CF0 = –$20,000; CF1 = $4,000; CF2 = $8,000; CF3 = $15,000

What is the crossover rate (r)?

## Answer to relevant Questions

If the NPV of a project is $5,090 and its after-tax initial investment is $10,050, what is its PI? Should the firm accept the project? Does the PI yield the same decision as the NPV? Longlife Company is considering an investment in Ponce Leon Mineral Baths. The investment has the same risk characteristics as the firm. It is assumed that all cash flows are perpetuities and that there are no taxes. ...Calculate the NPV and IRR of the following project and check whether they produce the same decision. After-tax initial investment is $66,777; after-tax cash flows at each of the following six year ends are $20,000. The ...Solve Practice Problem 56 using EANPV and assuming the market risk premium is 10 percent.Using NPV, should you invest in a project where the initial cash outflow is $25,000 and the cash inflow in the first year is $2,000 and “grows” at a rate of 2 percent thereafter? Assume cost of capital is 10 percent.Post your question

0