At what cost of capital projects have same net present value


Problem: Aubey Inc. is considering two projects that have the following cash flows:

Project 1    Project 2
Year    Cash Flow    Cash Flow
0    -$2,000    -$1,900
1    500    1,100
2    700    900
3    800    800
4    1,000    600
5    1,100    400

At what cost of capital would the two projects have the same net present value?

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Finance Basics: At what cost of capital projects have same net present value
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