Consider two projects with the following cash flow streams. What is the crossover rate?

Year 0 Year 1 Year 2

Project A: -$1,000 $1,020 $110

Project B: -$1,000 $110 $1,110

		6.65%
		7.71%
		7.81%
		9.89%
		11.11%

2. Projects A and B are mutually exclusive and have normal cash flows. Project A has an NPV of $427 and Project B has an NPV of $337. Project A has an IRR of 15% and Project B has an IRR of 10%. Which of the following statements is correct?

		Project B would be selected instead of Project A because NPV x IRR is greater.
		If the two projects are mutually exclusive, it is reasonable to pick either project given the information provided.
		Project B would be selected if the MIRR was lower as well.
		Project A would be selected instead of Project B.
		Project B would be selected instead of Project A.

1. The IRR calculation will return one result for the following cash flow series, which include inflows (+) and outflows (-):

   Period 0 1 2 3 4 5

   Series 1 - + + + + +

   Series 2 - + + + + -

   Series 3 - - - - - +

   Series 4 - + - + - +

   Series 5 + + + - - -

   		2, 4, 5
   		3, 4, 5
   		1, 2, 3, 4, 5
   		1, 3, 5
   		1, 2, 3, 4