In: Finance
Hodgkiss Enterprises has gathered projected cash flows for two projects.
Year | Project I | Project J | ||
0 | -269,000 | -269,000 | ||
1 | 113,100 | 96,400 | ||
2 | 106,800 | 100,900 | ||
3 | 90,800 | 102,900 | ||
4 | 79,800 | 109,900 | ||
At what interest rate would the company be indifferent between the two projects?
Which project is better if the required return is above this interest rate?