Question: You company is considering two mutually exclusive projects, S and L, whose costs and cash flows are shown below. Suppose that your company's cost of

You company is considering two mutually exclusive projects, S and L, whose costs and cash flows are shown below. Suppose that your company's cost of capital is 10%, can you calculate the crossover rate of the two NPV profiles? (Please use the formula approach to solve this problem)

Year 0 1 2

Project S -$90 $12 $112

Project L -$1,000 $120 $1,120

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