Question: You are considering Projects M and N, whose cash flows are shown below. These projects are mutually exclusive. Year: 0 1 2 3 4 Project

You are considering Projects M and N, whose cash flows are shown below. These projects are mutually exclusive.

Year:	0	1	2	3	4
Project M:	-$1,025	$650	$450	$250	$50
Project N:	-$1,025	$100	$300	$500	$700

At what discount rate are you indifferent between choosing project M or N? (That is, what is the crossover rate or the discount rate makes the NPV_M = NPV_N?)

	a.	10.54%
	b.	18.95%
	c.	30.93%
	d.	-15.51%
	e.	Cannot be calculated as all cash flows are positive.

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