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SJ Inc is considering the following 2 projects. SJ's WACC is 12%. What is the...

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Question

Finance

SJ Inc is considering the following 2 projects. SJ's WACC is 12%. What is the cross over rate of the projects?

project

Initial cost (t=0)

Yr 1 Cash Flow

Yr 2 Cash Flow

Yr 3 Cash Flow

AIN

-90

10

40

90

DIN

-100

60

55

20

19.46%

17.55%

17.02%

13.33%

QUESTION 19

  1. Jan Corp is considering the following projects:

    Project

    NPV

    IRR
    MMx2

    - $.5 million

    15.93%
    xxLL3

    $2.1 million

    14.02%

    Assuming that Projects MMx2 and xxLL3 are independent what would be the correct decision if Jan Corp's WACC is 14%?

    Project MMx2.

    Project xxLL3.

    Neither Project.

    Both Projects.

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