Calculate the exact crossover rate between a and b

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You are considering an investment in one of three projects A B or C (mutually exclusive) with the following projected cashflows

Years Project A Project B Project C

0 -50000 -50000 -20000

1 20000 35000 30000

2 25000 30000 30000

3 30000 25000 -40000

4 35000 20000
5 40000 15000

 

1) calculate NPV for each project

2)Calc IRR for each project

3)Calculate PI for each project

4)Using cost of capital calculate MIRR for each project

5) Calc the exact crossover rate between A & B

6) Calc NPV at the crossover rate between A&B

7) Which project should be accepted and why?

Reference no: EM13334231

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