8) Consider the following two mutually exclusive projects: Cash Flow Cash Flow Year (X) (Y) -$19,900 -$ 19,900 1 8,825 10,050 2 9,050 7,775 3 8,775 8,675 a) Calculate the NPV of Projects X and Y at...

Q8 -

Consider the following two mutually exclusive projects:

Year	Cash Flow (X)		Cash Flow (Y)
0	–$	19,900			–$	19,900
1		8,825				10,050
2		9,050				7,775
3		8,775				8,675

1. a) Calculate the NPV of Projects X and Y at discount rates of 0 %, 5 % ,10 %, 15 %, and 20%.


2. b) Calculate the IRR for each project.


3. c) Calculate the crossover rate for these two projects.

Extracted text: 8) Consider the following two mutually exclusive projects: Cash Flow Cash Flow Year (X) (Y) -$19,900 -$ 19,900 1 8,825 10,050 2 9,050 7,775 3 8,775 8,675 a) Calculate the NPV of Projects X and Y at discount rates of 0 %, 5 % ,10 %, 15 %, and 20%. b) Calculate the IRR for each project. c) Calculate the crossover rate for these two projects. d) At which range of discount rates would you choose Project X over Project Y? e) At which range of discount rates would you choose Project Y over Project X?