You are analyzing the following two mutually exclusive projects and have developed the following information.What is the crossover rate? $$\begin{array} { c c c }
\text { Year } & \text { Project A Cash Flow } & \text { Project B Cash Flow } \
0 & - \$ 75,000 & - \$ 75,000 \
1 & \$ 26,300 & \$ 24,000 \
2 & \$ 29,500 & \$ 26,900 \
3 & \$ 45,300 & \$ 51,300
\end{array}$$
A)13.17 percent
B)13.33 percent
C)14.32 percent
D)14.60 percent
E)15.20 percent

Question

You are analyzing the following two mutually exclusive projects and have developed the following information.What is the crossover rate? $$\begin{array} { c c c } 
\text { Year } & \text { Project A Cash Flow } & \text { Project B Cash Flow } \
0 & - \$ 75,000 & - \$ 75,000 \
1 & \$ 26,300 & \$ 24,000 \
2 & \$ 29,500 & \$ 26,900 \
3 & \$ 45,300 & \$ 51,300
\end{array}$$
A)13.17 percent
B)13.33 percent
C)14.32 percent
D)14.60 percent
E)15.20 percent

Quizplus · Accepted Answer

IRR of differences = 14.60 percent

You Are Analyzing the Following Two Mutually Exclusive Projects and Have