Question

In: Finance

2. Gurdreep is analyzing two projects. The first requires a $ 24,000 initial investment and returns...

2. Gurdreep is analyzing two projects. The first requires a $ 24,000 initial investment and returns $12,000 a year for four years. The second project requires a $30,000 initial investment and returns $14,000 a year for four years. What is the crossover point for these two projects?



i need answer now on copy write

Solutions

Expert Solution

The crossover point for two projects is the point calculated in excel as IRR of differential cash flow of two projects.

Therefore, the crossover rate is 12.59%


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