Question: A company is considering two separate, mutually exclusive projects A and B. Project A requires an initial investment of $1,000,000 and is expected to generate

A company is considering two separate, mutually exclusive projects A and

A company is considering two separate, mutually exclusive projects A and B. Project A requires an initial investment of $1,000,000 and is expected to generate after-tax cash flows of $75,000 per year forever. Project B requires an initial investment of $1,250,000 and is expected to generate after-tax cash flows of $98,000 per year forever. The appropriate discount rate is 8 percent. What is the crossover rate for projects A and B? 5.44% 9.2% 6.5% 8.36%

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