Question: Your company is considering two mutually exclusive projects, Project A and Project B. The cash flows from the projects are summarized below: Year Project
Your company is considering two mutually exclusive projects, Project A and Project B. The cash flows from the projects are summarized below: Year Project A Cash Flow Cash Flow Project B 0 ($100,000) (-XX,XXX) 1 $25,000 $30,000 2 $25,000 $40,000 3 $45,000 $50,000 4 $55,000 $60,000 5 $60,000 $100,000 The firm has finally determined that the cost (T=0 cash flow) of Project B is $145,000. Based on this information, determine the discount rate at which the NPV for both projects is the same.
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