Question: LG is considering two mutually exclusive projects, Project A and Project B. The projects are of 9 equal risk and have the following cash flows:

LG is considering two mutually exclusive projects, Project A and Project B. The projects are of 9 equal risk and have the following cash flows: Project A Project B Cash Flows -$100,000 40,000 25,000 70,000 40,000 Cash Flows -$100,000 30,000 15,000 78,000 55,000 At what rate (WACC) would the two projects have the same NPV (i.e., crossover rate)2 6.71% b. 7.53% c. 8.31% d. 10.03% e. 11.24%

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