Question: a firm must choose between two mutually exclusive projects, a & b. project a has an initial cost of $10000. its projected net cash flows
a firm must choose between two mutually exclusive projects, a & b. project a has an initial cost of $10000. its projected net cash flows are $800, $2000, $3000, $4000, and $5000 at the end of years 1 through 5, respectively. project b has an initial cost of $14000, and its projected net cash flows are $7000, $5000, $3000, $2000, and $1000 at the end of years 1 through 5, respectively. at what cost of capital would the firm be indifferent to the two projects (i.e. be willing to choose either one)?
3.47%
6.58%
6.82%
7.66%
7.18%
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