Question: Handy Enterprises has gathered projected cash flows for two projects. Year Project I Project J Yr0 $257,000 $257,000 Yr1 114,300 89,200 Yr2 104,400 99,700 Yr3

Handy Enterprises has gathered projected cash flows for two projects.

Year Project I Project J

Yr0 $257,000 $257,000

Yr1 114,300 89,200

Yr2 104,400 99,700

Yr3 88,400 101,700

Yr4 77,400 108,700

Requirement 1:

At what interest rate would the company be indifferent between the two projects?

Interest rate %

Requirement 2:

Which project is better if the required return is above this interest rate?

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