Question: NRJ & Co. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive. The WACC for the company

NRJ & Co. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive. The WACC for the company is 8.00%. What is the cross-over rate for these two projects and how do you interpret that information?

Year 0 1 2 3 4

CFS -$1,150 $550 $400 $300 $150

CFL -$1,050 $70 $250 $450 $650

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