Projects a and B Are Mutually Exclusive and Have an Initial

Multiple Choice

Projects A and B are mutually exclusive and have an initial cost of $78,000 each. Project A has annual cash flows for Years 1 to 3 of $28,300, $31,500, and $22,300, respectively. Project B has annual cash flows for Year 1 of $36,900 and $40,500 for Year 2. What is the crossover rate?

A) 17.17 percent
B) 16.33 percent
C) 17.32 percent
D) 16.99 percent
E) 15.20 percent