Consider the cash flow for projects A and B Year: 0, 1, 2, 3, 4, 5
Project A: ($1000), 100, 600, 700, 900, 300
Project B: ($1000), 900, 700, 500, 300, 300
The cost of capital for both projects is 10%
1. Find NPV, IRR and profitability index (PI) of projects A and B.
2. If projects A and B are mutually exclusive, which project would you select
3. Find the crossover rate for projects A and B