Question: ZZY, LLC, has identified the following two mutually exclusive projects: Year Cash Flow for A in $ Cash Flow for B in $ 0 -65,000
ZZY, LLC, has identified the following two mutually exclusive projects:
| Year | Cash Flow for A in $ | Cash Flow for B in $ |
| 0 | -65,000 | -65,000 |
| 1 | 34,000 | 19,000 |
| 2 | 27,000 | 25,000 |
| 3 | 21,000 | 29,000 |
| 4 | 17,000 | 34,000 |
Below what discount rate is B the better project than A? (Hint: You need to find the crossover rate).
Answer in percent to two decimals.
| Option A: 16.31 |
| Option B: 21.01 |
| Option C: 22.23 |
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
