What cost of capital do the two projects

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

                         Project A                  Project B

Year                       Cash Flow                  Cash Flow

0                             -$10,000            -$8,000

1                               4,000                 7,000

2                                 2,000                3,000

3                                      6,000            1,000

4                                            8,000        3,000

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.

Reference no: EM132522843

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