Crossover Point/Rate: Packard Electronics Corp

question 46

Multiple Choice

Crossover Point/Rate: Packard Electronics Corp. is evaluating the two mutually exclusive projects shown below.
Boundless Corp.
Project A
Project B
Period
Cash Flows
Cash Flows
0
$ (100,000)
$ (150,000)
1
50,000
15,000
2
40,000
30,000
3
30,000
50,000
4
20,000
70,000
5
10,000
80,000
What is the "crossover rate" of the two projects? (Round off to the nearest (0.01%)

• A) 10.82%
• B) 8.24%
• C) 13.76%
• D) 16.38%

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