Question: Garage, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -28,100 -28,100 1 13,500 3,850 2 11,400

Garage, Inc., has identified the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 -28,100 -28,100
1 13,500 3,850
2 11,400 9,350
3 8,750 14,300
4 4,650

15,900

Project A IRR: 16.39%

Project B IRR: 16.16%

When the Required Return is 12%, what is the NPV for both projects? PROJECT A: 2,224.82 PROJECT B: 3,074.46

**At what discount rate would the company be indifferent between these two projects?

The question with the asterics is the one I am having trouble with.

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