Question 32 George is interested in buying one of the two local businesses on sale:...
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Question 32 George is interested in buying one of the two local businesses on sale: a Coffee Shop or a Shoe Store. The cashflows of both the businesses are shown below. George can borrow from a bank at a rate of 7.00% to buy Coffee Shop and 6.00% to buy Shoe Store Coffee Shop Shoe Store Year -$100,000 $100,000 0 (Purchase Price) $7,188 $51,750 $21,562 $38,812 2 $40,250 $28,750 3 $50,315 $21,563 4 $57,500 $14,375 5 How much is the crossover rate of these projects? At crossover rate, both projects have the same NPV. Enter your answer in the following format: 0.1234; Hint: Answer is between 0.0917 and 0.11
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