Question: Flint Fruits is considering two equally risky, mutually exclusive projects, Projects A and B. that have the following cash flows: Year Project A Project B

 Flint Fruits is considering two equally risky, mutually exclusive projects, Projects

Flint Fruits is considering two equally risky, mutually exclusive projects, Projects A and B. that have the following cash flows: Year Project A Project B 0 -$100,000 -S100,000 1 40,000 30,000 2 25,000 15,000 3 70,000 80,000 4 40,000 35,000 At what cost of capital (discount rate) would the two projects have the same NPV? That is, what is the crossover rate? a) 12.55% b) 9.56% c) 14.49% d) 10.33% e) 11.21%

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