Crenshaw Enterprises has gathered projected cash flows for two projects. Year Project I Project J 0 $
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Question:
Crenshaw Enterprises has gathered projected cash flows for two projects.
Year | Project I | Project J |
0 | $ 258,000 | $ 258,000 |
1 | 114,200 | 89,800 |
2 | 104,600 | 99,800 |
3 | 88,600 | 101,800 |
4 | 77,600 | 108,800 |
a At what interest rate would the company be indifferent between the two projects? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
b Which project is better if the required return is above this interest rate?
Related Book For
Essentials of Corporate Finance
ISBN: 978-1259277214
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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