Central Energy is considering two mutually exclusive projects, Project Red and Project The projects have the following cash flows:
Year
Project Red
Cash Flows
Project White
0
-$1,000
1
100
700
2
200
400
3
600
4
800
Assume that both projects have a 10 percent WACC.
At what weighted average cost of capital would the two projects have the same net present value?
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