Question: Werqo Corp is considering two mutually exclusive projects, Projects A and B, and has determined that the crossover rate for these projects is 13.0 percent
Werqo Corp is considering two mutually exclusive projects, Projects A and B, and has determined that the crossover rate for these projects is 13.0 percent and the required return for both projects is 8.1 percent. You have determined that you should accept project A if the required return is 15.1 percent. Given this you know that:
| a) | you are indifferent to the projects at any discount rate below 13.0 percent. | |
| b) | both projects provide an internal rate of return of 13.0 percent. | |
| c) | neither project will be accepted if the discount rate is less than 8.1 percent. | |
| d) | the project that is acceptable at a discount rate of 12.7 percent should be rejected at a discount rate of 13.3 percent. | |
| e) | both projects have a zero NPV at a discount rate of 13.0 percent. |
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