Question: You are considering two mutually exclusive projects, with cash flows as shown below: Project A Project B CF0 ($50,000) ($80,000) CF1 $25,000 $12,000 CF2 $30,000

  1. You are considering two mutually exclusive projects, with cash flows as shown below: Project A Project B CF0 ($50,000) ($80,000) CF1 $25,000 $12,000 CF2 $30,000 $20,000 CF3 $15,000 $50,000 CF4 $8,000 $60,000 CF5 $5,000 $10,000
    1. What is the NPV for each project, at a discount rate of 12%?
    2. What is the IRR for each project?

c. Calculate the crossover rate for these two projects.

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