ix Co. is considering two mutually exclusive projects, Project A and Project B. TRe prajeel ie have the following cash flows: Projeet A Project B Year Cash Flows Cash Flows $110,000 40,000 40,000 50,000 90,000 $100,000 80,000 55,000 20,000 20,000 At what rate (WACC) would the two projects have the same NPV (i.e., crossover rate)? 8.47% 10.33% 13.95% 17.75% 25.11% a. b. e. which will yield cash flows of $30,000 in Star Corporation has been presented with an investment Year 1, $30,000 in Year 2, $20,000 in year 3, $15,000 in year 4, S10,000 in year 5, $8,000 in year 6. The initial cost of the firm is $100,000 and firm's cost of capital is 10 percent. What is the payback period for this 3.86 years b 4.50 years c. 5.83 years d. 6.29 years e. 7.35 years Which of the following statements is most The NPV method assumes that cash flows will be reinvested at the risk free rate while the IRR method assumes reinvestment at the IRR. assumes reinvestment at the risk-free rate. The NPV method assumes that cash flows will be reinvested at the cost of capital while the IRR method The NPV method does not consider the inflation premium. a. b. The NPV method assumes that cash flows will be reinvested at the cost of capital while the IRR method t at the IRR. d. e. The NPV method and IRR both assumes reinvestment at the risk-free rate