Project A has an initial cost of $75,000 and annual cash flows of $33,000 for three years.Project B costs $60,000 and has cash flows of $25,000,$30,000,and $25,000 for Years 1 to 3,respectively.Projects A and B are mutually exclusive.The incremental IRR is ________ and if the required rate is higher than the crossover rate then Project ________ should be accepted.
A)13.94 percent; A
B)12.89 percent; B
C)12.89 percent; A
D)13.94 percent; B
E)15.86 percent; A

Question

Quizplus · Accepted Answer

The Answer of Project A has an initial cost of $75,000 and annual cash flows of $33,000 for three years.Project B costs $60,000 and has cash flows of $25,000,$30,000,and $25,000 for Years 1 to 3,respectively.Projects A and B are mutually exclusive.The incremental IRR is ________ and if the required rate is higher than the crossover rate then Project ________ should be accepted.
A)13.94 percent; A
B)12.89 percent; B
C)12.89 percent; A
D)13.94 percent; B
E)15.86 percent; A

Project a Has an Initial Cost of $75,000 and Annual