Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 –$ 19,900 –$ 19,900 1 8,825 10,050 2 9,050 7,775 3 8,775 8,675 c) Calculate the crossover rate for these two projects. Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 –$ 19,900 –$ 19,900 1 8,825 10,050 2 9,050 7,775 3 8,775 8,675 you have solved all other parts only balance Part C c) Calculate the crossover rate for these two projects.
Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 –$ 19,900 –$ 19,900 1 8,825 10,050 2 9,050 7,775 3 8,775 8,675 c) Calculate the crossover rate for these two projects. Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 –$ 19,900 –$ 19,900 1 8,825 10,050 2 9,050 7,775 3 8,775 8,675 you have solved all other parts only balance Part C c) Calculate the crossover rate for these two projects.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
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Consider the following two mutually exclusive projects: |
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Year |
Cash Flow |
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Cash Flow |
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0 |
–$ |
19,900 |
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–$ |
19,900 |
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1 |
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8,825 |
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10,050 |
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2 |
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9,050 |
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7,775 |
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3 |
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8,775 |
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8,675 |
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- c) Calculate the crossover rate for these two projects.
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Consider the following two mutually exclusive projects: |
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Year |
Cash Flow |
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Cash Flow |
||||
|
0 |
–$ |
19,900 |
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–$ |
19,900 |
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1 |
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8,825 |
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10,050 |
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2 |
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9,050 |
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7,775 |
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3 |
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8,775 |
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8,675 |
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you have solved all other parts only balance Part C
- c) Calculate the crossover rate for these two projects.
Transcribed Image Text:Question 8
Consider the following two mutually exclusive projects:
Cash
Cash Flow
Year
Flow
(X)
(Y)
-$19,900
519,900
1
8,825
10,050
2
9,050
7,775
3
8,775
8,675
a) Calculate the NPV of Projects X and Y at discount rates of 0 %, 5 % ,10 %, 15 %,
and 20%.
bl Calculate the IRR for each proiect
c) Calculate the crossover rate for these two projects.
aj Af which range of aisCouni rates wOuId you choose Project X over Project Y?
e) At which range of discount rates would you choose Project Y over Project X?
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