Question: Airneon Corpn is considering two mutually exclusive projects, Project A and Project B. The projects are of equal risk and have the following cash flows:

Airneon Corpn is considering two mutually exclusive projects, Project A and Project B. The projects are of equal risk and have the following cash flows: Project A Project B Year Cash Flows Cash Flows -$100.000 $110,000 40,000 70.000 2 25.000 50.000 3 50,000 25,000 4 7 0,000 40,000 At what WACC are the two projects indifferent, that is at what rate are the NPVs of the two projects equal? 15.50% 11.21% 12.26% 16.23% 13.78%

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