Question: NPV versus IRR. Consider the following two mutually exclusive projects: Year Cash flow (X) Cash flow (Y) 0 -9500 -9500 1 5800 3500 2 4000

NPV versus IRR. Consider the following two mutually exclusive projects:

Year

Cash flow (X)

Cash flow (Y)

0

-9500

-9500

1

5800

3500

2

4000

5000

3

4000

6000

1. Calculate the NPV for projects X and Y if the required rate of return is 10%

2. Calculate the NPV for projects X and Y if the required rate of return is 15%

3. Calculate the NPV for projects X and Y if the required rate of return is 24%

4. Calculate the crossover rate for these two projects.

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