What is the crossover rate

Assignment Help Finance Basics
Reference no: EM131725619

GE is considering Projects A and B, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The cost of capital is 10%, and the IRR is 10.53%. What's the crossover rate (if any).

r = 10.00

IRR = 10.53%

Year

0

1

2

3

4

CFS

-$1,100

$550

$600

$100

$100

CFL

-$2,750

$725

$725

$800

$1,400

A. 8.53%

B. 9.53%

C. 10.53%

D. 11.53%

E. Cannot be determined without additional information

Reference no: EM131725619

Questions Cloud

Weighted average cost of capital : A company has determined that its optimal capital structure consists of 40 percent debt and 60 percent equity. Given the following information
Dividend every year for the time being : How much are you willing to pay for one share of this stock is you want to earn a 14.5% annual return?
How you think sustainability efforts by walmart will impact : How do you think sustainability efforts by Walmart will impact the larger logistics industry? How this program of companies encouraging their people?
Develop two proposals in different professional settings : Explain how you would feel about being diagnosed by a doctor who could be hundreds or thousands of miles from you.
What is the crossover rate : These projects are mutually exclusive, equally risky, and not repeatable. The cost of capital is 10%, and the IRR is 10.53%. What's the crossover rate (if any).
Compute the depreciation expense using straight-line method : Calculate the depreciation expense using the straight-line method for the first two years the equipment is owned.
What specific features and benefits your product provides : What specific features and benefits your product provides to the intended target market. A description of aesthetics, packaging, labelling, or look of product.
What current assets are included on the balance sheet : Internet Problem Choose a publicly held corporation (unless your teacher assigns a particular corporation for this assignment) and find the balance sheet.
Distinguishing between variable and fixed costs : Explain the importance of distinguishing between variable and fixed costs.

Reviews

Write a Review

Finance Basics Questions & Answers

  What constant-growth rate in dividends

What constant-growth rate in dividends is expected for a stock valued at $50.00 if next year's dividend is forecast at $2.00 and the appropriate discount

  What is the possible range of prices for this bond

If interest rates are currently 9 percent on comparable high-yield securities but the investor has no forecast as to future rates, what is the possible range of prices for this bond?

  Identify variances of direct labor

We've focused on ways to identify variances of direct labor and direct materials expenses. But, once they are identified, how would a manager.

  Computing the present value of this investment

Computing the present value of this investment and what is the present value of this investment

  The minimum payment that the lessor is likely to accept

The tax rate is 35%, and the rate of interest is 10%. What is the maximum lease payment that the lessee company should be willing to make and the minimum payment that the lessor is likely to accept.

  Calculate the revised portfolio beta riskiest beta

Calculate the Revised Portfolio beta riskiest beta replaced by risky fewer betas and who believes the economy is slowing down

  What is the price variance

Last year the price for thermometer covers in a pediatrician's office was $.10 each. This year, the covers cost $.12 each. If the office purchased 20,000 thermometer covers this year, what is the price variance?

  Singal inc is preparing its cash budget it expects to have

singal inc. is preparing its cash budget. it expects to have sales of 30000 in january 35000 in february and 35000 in

  What is the projected amount of fixed costs

A company is considering a project with a cash break-even point of 22,600 units. The selling price is $28 a unit, the variable cost per unit is $13, and depreciation is $14,000. What is the projected amount of fixed costs?

  What is its present value and its future value

An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 8% annually, what is its present value? its future value?

  Computation of the weighted average cost of capital

Computation of the weighted average cost of capital and Jake's Sound Systems has 210,000 shares of common stock outstanding at a market price of $36 a share

  Examples of discrete and continuous variables

Provide some examples of discrete and continuous variables. What attributes of these variables make them discrete and continuous? Why?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd