QUESTION 14 Projects A and B are mutually exclusive and both have an initial cost of $65,000. Annual Cash flows are following the table. What is the crossover rate (i.e. At what discount rate would the company be indifferent between these two projects)? CFs CFs Year Project AlProject B -65,000-65,000 10,00012,000 20,00050,000 55.000 20.000 0 2 3 A 8.78 percent 4.33 percent 14.32 percent 15.20 percent 9.17 percent B QUESTION 15 Assume a project has a sales quantity of 8,000 units, plus or minus 5 percent and a sales price of $70 a unit, plus or minus 1 percent. The expected variable cost per unit is $12+3 percent and the expected fixed costs are $300,000 plus or minus 2 percent. The depreciation expense is $70,000. The tax rate is 34 percent. What is the operating cash flow under the best-case scenario? A$192,002.89 B $168,470.15 C.$157,188.64 0 $148,755.09 $175,056.67 QUESTION 16 Projects A and B have identical expected lives and identical initial cash outflows (costs), but their future cash flows are different. The future cash flows are such that, if we increase the required rate of return (r), the NPV of project A decreases faster than that of project B. What can we say about the future cash flows of the two projects? NPV(S) r(%) A. More of Project A's cash flows occur in the later years. All of project B's future cash flows are larger than those of project A All of project A's future cash flows are larger than those of project B We must have more information to be able to say anything about cash flows. More of Project B's cash flows occur in the later years. B. C. E