Find the crossover rate of projects a and b

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1. Compute the internal rate of return for the following cash flows: Period 0: -1750 Period 1: 1200 Period 2: 600 Period 3: 350 Enter your answer in percent and round to the nearest 0.01.

2. Compute the modified internal rate of return for the following cash flows using a discount rate of 8%:
Period 0: -1636
Period 1: 686
Period 2: 787
Period 3: 644
Enter your answer in percent and round to the nearest 0.01%.

3. Find the crossover rate of projects A and B
Year      Project A       Project B
0             -1350             -450
1               975               390
2               700               275
Enter your answer in percent and round to the nearest 0.01%.

4.Machinery costs $1 million today and $100,000 per year to operate. It lasts for 8 years. What is the equivalent annual annuity if the discount rate is 9%? Enter your answer in dollars and round to the cent.

Remember that costs are negative cash flows; so, include the negative sign.

5. Find the profitability index of a project with the following cash flows using a discount rate of 10%:
Period 0: -1000
Period 1: 720
Period 2: 351
Period 3: 272
Enter your answer in a decimal and round to the hundredths place.

Reference no: EM131884771

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