Central Energy is considering two mutually exclusive projects, Project Red and  Project The projects have the following cash flows:

Year	Project Red  Cash Flows	Project White  Cash Flows
0	-$1,000	-$1,000
1	100	700
2	200	400
3	600	200
4	800	100

 

Assume that both projects have a 10 percent WACC.

 

At what weighted average cost of capital would the two projects have the same net present value?

Answer rating: 100% (QA)

A Year 0 1 2 3 4 B D E Project Red Difference Formu... View the full answer