You are considering the following two mutually exclusive projects. The crossover rate between these two projects is ___ percent and Project ___ should be accepted if the required return is greater than the crossover rate.

Year Project A Project B

0 $38,000 $38,000

1 21,500 13,710

2 13,500 11,500

3 13,500 25,500

Answers

• 14.12%; B

• 11.94%; A

• 11.94%; B

• 14.62%; A

• 14.62%; B