Question: You are considering the following two mutually exclusive projects. The crossover point is _____ and Project _____ should be accepted at a 15 percent discount rate. You are considering the following two mutually exclusive projects. The crossover rate between these two projects is ___ percent and Project ___ should be accepted if the required return is greater than the crossover rate. 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: Question 7 options: A) always accept project A. B) be indifferent to the projects at any discount rate above 13.1 percent. Crossover rate: cost of capital two projects have the same NPV Gardial Fisheries: Net Cash Flows, NPV, IRR & Crossover Rate Profitability Index, Project Crossover Rate, Project Cash Flow Sketching NPV profiles and Determining Crossover Rate Financial Management: IRR, Crossover Rates, NPV Mutually Exclusive Projects Projects After-Tax Cash Flows a. internal rate of return. b. crossover point. c. point of profitability. d. payback point of equivalency. 6. b. 7. You are analyzing the following two mutually exclusive projects and have developed . the following information. What is the crossover rate? Project A Project B. Year Cash Flow Cash Flow. 0 -$84,500 -$76,900. 1 $29,000 $25,000. 2 Boston Chicken is considering two mutually exclusive projects with the following cash flows. What is the crossover rate? If the required rate of return is lower than the crossover rate, which project should be accepted?
Crossover Rate is the rate of return (alternatively called weighted average cost of capital) at which the Net Present Values (NPV) of two projects are equal. It represents the rate of return at which the NPV profile of one project intersects the NPV profile of another project. Mutually exclusive is a statistical term describing two or more events that cannot coincide. It is commonly used to describe a situation where the occurrence of one outcome supersedes the other.
when evaluating mutually exclusive projects because of scale effects or the timing of incorporate the crossover rate, which is the critical reinvestment rate in
Definition of Crossover rate in the Financial Dictionary - by Free online English dictionary and encyclopedia. What is Crossover rate? Meaning of Crossover rate B) be indifferent to the projects at any discount rate above 13.1 percent. The crossover rate between two mutually exclusive projects is the discount rate at
In capital budgeting analysis exercises, crossover rate is used to show when one investment project becomes superior to another as a result of a change in the The crossover rate (CR) is the discount rate at which both projects deliver the same net present value. The crossover rate formula is the same as that for the IRR, Assuming that Project A and B are mutually exclusive, consider their NPV profiles . If the cost of capital > crossover rate, then NPVB > NPVA and IRRB > IRRA.