The cost of capital for both projects

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Reference no: EM131815675

onsider the following cash flows for projects A and B.

Year Project A Project B

0 -$1000 -$1000

1 375 900

2 375 700

3 375 500

4 375 -200

5 -100 200

The cost of capital for both projects is 10%. What is the cross over rate for projects A and B (the rate at which NPV profiles of the projects intersect each other)?

Reference no: EM131815675

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