Joy Products has two projects, which are mutually exclusive. The cash flows will be:

Year Cash flow (A) Cash flow (B)

0 $80,000 $80,000

1 $60,000 $10,000

2 $30,000 $15,000

3 $20,000 $22,000

4 $10,000 $40,000

5 $5,000 $60,000

(a) If the discount rate is 8%, which project should be adopted?

(b) If the discount rate is 15%, which project should be adopted?

(c) Use Excel to compute the crossover point.