Anderson Associates Is Considering Two Mutually Exclusive Projects That Have

Multiple Choice

Anderson Associates is considering two mutually exclusive projects that have the following cash flows:​​​ $\begin{array}{lrr} & \text { Project 1 } & {\text { Project 2 }} \\ \text { Year }& \text{ Cash Flow }&\text { Cash Flow }\\\hline0 & -\$ 10,000 & -\$ 8,000 \\1 & 1,000 & 7,000 \\2 & 2,000 & 1,000 \\3 & 6,000 & 1,000 \\4 & 6,000 & 1,000\end{array}$ ​​At what cost of capital do the two projects have the same NPV? (That is,what is the crossover rate?)

A) 11.20%
B) 12.26%
C) 13.03%
D) 14.15%