You are comparing two mutually exclusive projects. The crossover point is 9 percent. You determine
that you should accept project A if the required return is 6 percent. This implies that you should
always reject project B if the required return is 6 percent.

Question

Quizplus · Accepted Answer

Since the crossover point is 9 percent and project A should be accepted at a required return of 6 percent, it implies that project B would have a required return above 9 percent, making it always less favorable than project A at a required return of 6 percent. Therefore, project B should be rejected at a required return of 6 percent.

You Are Comparing Two Mutually Exclusive Projects