A company is considering two mutually exclusive expansion plans. Plan A requires a $30 million initial outlay on a large-scale integrated plant that would provide expected cash flows of $5 million per year for 20 years. Plan B requires a $8 million initial outlay to build a somewhat less efficient, more labor-intensive plant with expected cash flows of $1.78 million per year for 20 years. The firms WACC is 8%.

In terms of NPV, at what discount rate, would the company be indifferent between the two projects? (i.e., what is the value of the crossover rate?)

Group of answer choices

13.47%

22.00%

8.00%

15.78%