Question: There are two mutually exclusive projects. Project A costs $55 today and will produce cash flows of 20, 11, 43 in the subsequent 3 years.

There are two mutually exclusive projects. Project A costs $55 today and will produce cash flows of 20, 11, 43 in the subsequent 3 years. Project B costs $400 today and will produce cash flows of 200, 210, 60 in the subsequent 3 years. What is the crossover rate? Since Project A has a higher IRR, the firm should always pick project A over Project B (True or False).

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