Question: Please present all final answers to two decimals for number (e.g. 1.23) and two decimals for percent FULL working must be presented (with formulas, working

Please present all final answers to two decimals for number (e.g. 1.23) and two decimals for percent

FULL working must be presented (with formulas, working stages, and results with units).

Please present all final answers to two decimals for number (e.g. 1.23)

Question 3 (20 marks): Assume two investments A and B given below: Year Today 1 Expected cash flows B $400 $400 $0 $150 $170 $150 $300 $150 2 3 a. What is the crossover rate for the two investments A and B where your preference for one investment changes from one investment to the other investment? (10 marks) b. If your opportunity cost of capital is 6%, discuss your investment decision using the Profitability Index (PI). (10 marks) (Show ALL workings)

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