Anderson Associates is considering two mutually exclusive projects that have the following cash flows: Project A...

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Anderson Associates is considering two mutually exclusiveprojects that have the following cash flows: Project A Project BYear Cash Flow Cash Flow 0 -$11,000 -$9,000 1 3,500 6,000 2 3,0004,000 3 5,000 3,000 4 9,000 2,000 At what cost of capital do thetwo projects have the same net present value? (That is, what is thecrossover rate?) Enter your answer rounded to two decimal places.Do not enter % in the answer box. For example, if your answer is0.12345 or 12.345% then enter as 12.35 in the answer box.

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Solution Thus the cost of capital at which the two See Answer

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Anderson Associates is considering two mutually exclusiveprojects that have the following cash flows: Project A Project BYear Cash Flow Cash Flow 0 -$11,000 -$9,000 1 3,500 6,000 2 3,0004,000 3 5,000 3,000 4 9,000 2,000 At what cost of capital do thetwo projects have the same net present value? (That is, what is thecrossover rate?) Enter your answer rounded to two decimal places.Do not enter % in the answer box. For example, if your answer is0.12345 or 12.345% then enter as 12.35 in the answer box.