GE is considering Projects A and B, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The cost of capital is 10%, and the IRR is 10.53%. What's the crossover rate (if any).
r = 10.00
IRR = 10.53%
Year
0
1
2
3
4
CFS
-$1,100
$550
$600
$100
$100
CFL
-$2,750
$725
$725
$800
$1,400
A. 8.53%
B. 9.53%
C. 10.53%
D. 11.53%
E. Cannot be determined without additional information