In: Finance
Zayas, LLC, has identified the following two mutually exclusive
projects:
Year | Cash Flow (A) | Cash Flow (B) | ||||||
0 | −$ | 53,000 | −$ | 53,000 | ||||
1 | 29,000 | 16,700 | ||||||
2 | 23,000 | 20,700 | ||||||
3 | 17,500 | 25,000 | ||||||
4 | 12,600 | 25,700 | ||||||
Over what range of discount rates would you choose Project A?
Over what range of discount rates would you choose Project B?
At what discount rate would you be indifferent between these two
projects?