Question: Two projects being considered are mutually exclusive and have the following projected cash flows: Year Project A Project B 0 -$50,000 -$ 50,000 1 15,990

Two projects being considered are mutually exclusive and have the following projected cash flows:

Year

Project A

Project B

0

-$50,000

-$ 50,000

1

15,990

0

2

15,990

0

3

15,990

0

4

15,990

0

5

15,990

100,560

At what rate (approximately) do the NPV profiles of Projects A and B cross?

a. 6.5%

b. 11.5%

c. 16.5%

d. 20.0%

e. The NPV profiles of these two projects do not cross.

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