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What is the crossover rate

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Project A requires an investment today of $40,539, and will produce an annual "growing" perpetuity with an initial payment of $9,266 one year from today and from there annual payments will growt at 2% per year. Project B requires an investment today of $90,516, and will produce an annual "growing" perpetuity with an initial payment one year from today of $16,205, and annual payments that grow from there at the same rate of growth as for project A.

What is the crossover rate? Express your answer in decimal format, rounded and accurate to 4 decimal places. For example, if you calculate that the rate is 12.345%, this should be entered as 0.1235.

Reference no: EM133003538

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