Question: McCarver Inc. is considering the following mutually exclusive projects: Project A Project B Year Cash Flow Cash Flow 0 -$5,000 -$5,000 1 200 3,000 2

McCarver Inc. is considering the following mutually exclusive projects:

Project A

Project B

Year

Cash Flow

Cash Flow

0

-$5,000

-$5,000

1

200

3,000

2

800

3,000

3

3,000

800

4

5,000

200

At what cost of capital will the net present value of the two projects be the same? (That is, what is the "crossover" rate?) Round it to one decimal place, e.g., 10.5.

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