Question: Consider, again, the net cash flows for projects A and B in Bayside Biotechtronics, summarized in Table. a. Illustrate the net present value profiles for

Consider, again, the net cash flows for projects A and B in Bayside Biotechtronics, summarized in Table.

a. Illustrate the net present value profiles for projects A and B.

b. What is the crossover rate for the two projects?

c. Assuming that projects A and B are mutually exclusive, which project should be selected if the cost of capital is greater than the crossover rate?

Which project should be selected if the cost of capital is less than the crossover rate?

Net Cash Flows (CFt) for Projects A and B

Year,t Project A Project B

0 -$25,000 -$19,000

1 7,000 6,000

2 8,000 6,000

3 9,000 6,000

4 9,000 6,000

5 5,000 6,000

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