McCarver Inc is considering the following mutually exclusive projects Project A Project B Year Cash Flow Cash Flow 0 $5,000 $5,000 1 400 4,000 2 600 1,900 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 in percentage, e g , 10 5

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Question: McCarver Inc. is considering the following mutually exclusive projects: Project A Project B Year Cash Flow Cash Flow 0 $5,000 $5,000 1 400 4,000 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	400	4,000
2	600	1,900
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 in percentage, e.g., 10.5.

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