Comparing two mutually exclusive projects


Assignment task: You are comparing two mutually exclusive projects. The crossover point is 12.3 percent. You have determined that you should accept project A if the required return is 13.1 percent. This implies you should: Always accept Project A. Be indifferent to the projects at any discount rate above 13.1 percent. Always accept Project A if the required return exceeds the crossover rate. Accept Project B only when the required return is equal to the crossover rate. Accept Project B if the required return is less than 13.1 percent.

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Finance Basics: Comparing two mutually exclusive projects
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