Question: Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 $15,100 $15,100 1 6,790 7,450 2 7,370 7,650 3 4,890

Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 $15,100 $15,100 1 6,790 7,450 2 7,370 7,650 3 4,890 3,790 What is the IRR of Project X? 11.29% 12.29% 13.29% 14.29% What is the IRR of Project Y? 11.48% 12.48% 13.48% 14.48% What is the crossover rate for these two projects? 9.62% 10.62% 11.62% 12.62% Based on the info above, if discount rate is 9%, which project is better?

Project X Project Y They are equivalently good If instead, we assume the company requires a discount rate of 7% and uses NPV to make capital budgeting decisions, which project should be accepted? Still, the two projects are mutually exclusive. Project X Project Y Both projects Neither project?

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