Question: Consider the following two mutually exclusive projects: Year ______Cash Flow (X) ___________Cash Flow (Y) 0 ............... -$15,000 .......................... -$15,000 1 ................... 8,150 .............................. 7,700 2

Consider the following two mutually exclusive projects:

Year ______Cash Flow (X) ___________Cash Flow (Y)

0 ............... -$15,000 .......................... -$15,000

1 ................... 8,150 .............................. 7,700

2 ................... 5,050 .............................. 5,150

3 ................... 6,800 .............................. 7,250

Sketch the NPV profiles for X and Y over a range of discount rates from zero to 25 percent. What is the crossover rate for these two projects?

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