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Find what cost of capital do two projects net present value

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Reference no: EM132543591

Anderson Associates is considering two mutually exclusive projects that have the following cash flows:

                    Project A                 Project B

Year            Cash Flow                    Cash Flow

0                  -$11,000                 -$9,000

1                      1,500                    6,000

2                      3,000                    4,000

3                      5,000                    3,000

4                      9,000                    2,000

Question 1: At what cost of capital do the two projects have the same net present value? (That is, what is the crossover rate?) Enter your answer rounded to two decimal places. Do not enter % in the answer box. For example, if your answer is 0.12345 or 12.345% then enter as 12.35 in the answer box.

Reference no: EM132543591

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