In: Finance

You are evaluating two projects with the following cash
flows:

Year | Project X | Project Y | |||

0 | −$552,600 | −$521,000 | |||

1 | 217,700 | 207,400 | |||

2 | 227,600 | 217,200 | |||

3 | 234,800 | 225,100 | |||

4 | 194,500 | 185,900 | |||

What is the crossover rate for these two projects?

**Solution :**

**The cross over rate for the two projects is = 9.28
%**

**Please find the attached screenshot of the excel sheet
containing the detailed calculation for the solution.**

Matterhorn Mountain Gear is evaluating two projects with the
following cash flows:
year
project x
project y
0
-319,400
-299,050
1
146,100
137,300
2
163,600
154,500
3
128,700
120,250
What interest rate will make the NPV for the projects equal?
a)14.22%
b)18.31%
c)12.64%
d).26%
e)18.05%

The following are the
cash flows of two projects:
Year
Project A
Project B
0
?$
380
?$
380
1
210
280
2
210
280
3
210
280
4
210
If the opportunity
cost of capital is 11%, what is the profitability index for each
project? (Do not round intermediate calculations. Round
your answers to 4 decimal places.)

The following are the cash flows of two projects:
Year Project A Project B
0 ?$ 280 ?$ 280
1 160 180
2 160 180
3 160 180
4 160
If the opportunity cost of capital is 10%, what is the
profitability index for each project? (Do not round intermediate
calculations. Round your answers to 4 decimal places.) Project A
Profitability Index Project B

The following are the cash flows of two projects: Year Project A
Project B 0 −$ 290 −$ 290 1 170 190 2 170 190 3 170 190 4 170 If
the opportunity cost of capital is 11%, what is the profitability
index for each project? (Do not round intermediate calculations.
Round your answers to 4 decimal places.)

The following are the cash flows of two projects:
Year
Project A
Project B
0
$
(330)
$
(330)
1
160
230
2
160
230
3
160
230
4
160
If the opportunity cost of capital is 12%, what is the
profitability index for each project? (Do not round
intermediate calculations. Round your answers to 4 decimal
places.)
Project Profitability Index:
A
B

The following are the cash flows of two projects: Year Project A
Project B 0 ?$ 220 ?$ 220 1 100 120 2 100 120 3 100 120 4 100 If
the opportunity cost of capital is 10%, what is the profitability
index for each project? (Do not round intermediate calculations.
Round your answers to 4 decimal places.)

The following are the
cash flows of two projects:
Year
Project A
Project B
0
$
(260
)
$
(260
)
1
140
160
2
140
160
3
140
160
4
140
a. Calculate the NPV for both projects if the
opportunity cost of capital is 16%. (Do not round
intermediate calculations. Round your answers to 2 decimal
places.)
Project A
Project B
b.
Suppose that you can choose only one of these projects. Which would
you choose?
Project A...

The following are the cash flows of two projects:
Year
Project A
Project B
0
$(340)
$(340)
1
170
240
2
170
240
3
170
240
4
170
A.) Calculate the NPV for both projects if the opportunity costs
of capital is 15%. *(2 decimal places, do not round intermediate
calculations)
B.) Suppose you can choose one one of these projects, which
would you choose?

The following are the cash flows of two projects:
Year
Project A
Project B
0
−$330
−$330
1
160
230
2
160
230
3
160
230
4
160
a.
Calculate the NPV for both projects if the opportunity cost of
capital is 17%. (Do not round intermediate calculations.
Round your answers to 2 decimal places.)
Project
NPV
A
$
B
b.
Suppose that you can choose only one of...

The cash flows for the two projects are as follows? ($
million):
Project
Year 0
Year 1
Year 2
Year 3
Year 4
A
- $ 100
$26
$28
$42
$52
B
-$ 100 $52 $42 $28 $18
a. What is the IRR of each? project?
b. What is the NPV of each project at your cost of? capital?
c. At what cost of capital are you indifferent between the two?
projects?
d. What should you? do?

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