Question: Consider the cash flows from two mutually exclusive projects: Cash Flow Year Project A Project B 0 -$490,000 -$430,000 1 $120,000 $381,000 2 $270,000 $120,000

Consider the cash flows from two mutually exclusive projects:

Cash Flow
Year Project A Project B
0 -$490,000 -$430,000
1 $120,000 $381,000
2 $270,000 $120,000
3 $387,000 $120,000

The appropriate discount rate is 9.5%. The crossover rate is:

15.44537%

$109,425

27.61066%

22.32152%

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