What is the cross rate

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Q1. Radiology Associates is considering an investment which will cost $259,000. The investment produces no cash flows for the first year. In the second year, the cash inflow is $58,000. This inflow will increase to $150,000 and then $200,000 for the following two years before ceasing permanently. The firm requires a 14% rate of return and has a required discount payback period of 3 years. Accept or reject this project? Why?

Q2. You are analyzing the following two mutually exclusive projects and have developed the following information. What is the cross rate?

Year

Project A Cash Flow

Project B Cash Flows

0

-$80,300

-$77,900

1

25,500

25,000

2

14,000

13,000

3

47,800

46,000

Reference no: EM132567152

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