Question: 29. Suppose project WIZE and project SOS are mutually exclusive. Project WIZE requires an initial cash outlay of $50,000 and is expected to provide after-tax

29. Suppose project WIZE and project SOS are mutually exclusive. Project WIZE requires an initial cash outlay of $50,000 and is expected to provide after-tax cash flows of $15,000 in year 1, $25,000 in year 2, $20,000 in year 3, and $15,000 in year 4. Project SOS requires an initial cash outlay of $75,000 and is expected to provide after-tax cash flows of $20,000 in year 1, $28,000 in year 2, $35,000 in year 3, and $20,000 in year 4. The appropriate discount rate is 12 percent. What is the crossover rate?

a) 4.30%

b) 4.87%

c) 13.72%

d) 18.59%

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