Question: Gore Global is considering the two mutually exclusive projects below. The cash flows from the projects are summarized below. Year ManBearPig Project Cash Flow Flying
Gore Global is considering the two mutually exclusive projects below. The cash flows from the projects are summarized below.
| Year | ManBearPig Project Cash Flow | Flying Car Cash Flow |
| 0 | -$100,000 | -$200,000 |
| 1 | 25,000 | 50,000 |
| 2 | 25,000 | 50,000 |
| 3 | 50,000 | 80,000 |
| 4 | 50,000 | 100,000 |
The two projects have the same risk. At what cost of capital would the two projects have the same net present value (NPV)?
| A. | 10.03% | |
| B. | -24.45% | |
| C. | 2.86% | |
| D. | 13.04% | |
| E. | 15.90% |
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