Project A has a five-year life and an initial cost of $1,600 and annual cash flows of $600 per year. Project B also has a five-year life and an initial cost of $2,500 with annual cash flows of $850 per year. Given this information, calculate the NPV that the IRR cross-over rate provides.
A) $400
B) $560
C) $600
D) $700
E) $800

Question

Quizplus · Accepted Answer

The Answer of Project A has a five-year life and an initial cost of $1,600 and annual cash flows of $600 per year. Project B also has a five-year life and an initial cost of $2,500 with annual cash flows of $850 per year. Given this information, calculate the NPV that the IRR cross-over rate provides.
A) $400
B) $560
C) $600
D) $700
E) $800

Project a Has a Five-Year Life and an Initial Cost