Question: Anderson Associates is considering two mutually exclusive projects that have the following cash flows: Project A Project B Year Cash Flow Cash Flow 0 -$10,000

Anderson Associates is considering two mutually exclusive projects that have the following cash flows: Project A Project B Year Cash Flow Cash Flow 0 -$10,000 -$8,000 1 5,000 7,000 2 2,000 3,000 3 6,000 1,000 4 8,000 3,000 At what cost of capital do the two projects have the same net present value? (That is, what is the crossover rate?)

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