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

Airneon corporation is considering two mutually exclusive projects, project A and project B. the projects are of equal risk and have the following cash flows:

Year Cash Flows (A) Cash Flows (B)

0 -$100,000 -$115,000

1 $15,000 $50,000

2 $15,000 $50,000

3 $50,000 $20,000

4 $60,000 $20,000

At what WACC are the two projects indifferent, that is at what rate are the NPVS of the two projects equal?

A. 11.21%

B. 12.26%

C. 13.78%

D. 15.50%

E. 16.23%

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