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What is the crossover rate

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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

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