Projects A and B are mutually exclusive. Project A has cash flows of -$10,000, $5,100, $3,400, and $4,500 for Years 0 to 3, respectively. Project B has cash flows of -$10,000, $4,500, $3,400, and $5,100 for Years 0 to 3, respectively. What is the crossover rate for these two projects?
A) 0 percent
B) 5.48 percent
C) 6.71 percent
D) 2.75 percent
E) 4.94 percent

Question

Projects A and B are mutually exclusive. Project A has cash flows of -$10,000, $5,100, $3,400, and $4,500 for Years 0 to 3, respectively. Project B has cash flows of -$10,000, $4,500, $3,400, and $5,100 for Years 0 to 3, respectively. What is the crossover rate for these two projects?
A) 0 percent 
B) 5.48 percent 
C) 6.71 percent 
D) 2.75 percent 
E) 4.94 percent

Quizplus · Accepted Answer

The Answer of Projects A and B are mutually exclusive. Project A has cash flows of -$10,000, $5,100, $3,400, and $4,500 for Years 0 to 3, respectively. Project B has cash flows of -$10,000, $4,500, $3,400, and $5,100 for Years 0 to 3, respectively. What is the crossover rate for these two projects?
A) 0 percent 
B) 5.48 percent 
C) 6.71 percent 
D) 2.75 percent 
E) 4.94 percent

Projects a and B Are Mutually Exclusive