Crossover rate: cost of capital two projects have the same NPV

I am considering 2 mutually exclusive projects. The projects have the following cash flows:

Year X Cash Flow Y Cash Flow
0 -10,000 -8,000
1 1,000 7,000
2 2,000 1,000
3 6,000 1,000
4 6,000 1,000
At what cost of capital do the two projects have the same net present value? (That is, what is the crossover rate?)

Solution Preview

The answer is in the attached Excel file.

I am considering 2 mutually exclusive projects. The projects have the following cash flows:
Year X Cash Flow Y Cash Flow
0 -10,000 -8,000
1 1,000 7,000
2 2,000 1,000
3 6,000 1,000
4 6,000 1,000
At what cost of capital do the two projects have the same net present value? (That is, what is the crossover rate?)

The crossover rate is the IRR of the cash flow obtained by subtracting one set of cash flows from the other

Year X Cash Flow Y Cash Flow Difference
0 -10,000 -8,000 -2,000
1 1,000 7,000 -6,000
2 2,000 1,000 1,000
3 6,000 1,000 5,000
4 6,000 1,000 5,000

IRR (Internal rate of return) is calculated using Excel ...

Solution Summary

Calculates the crossover rate- the cost of capital at which two projects have the same NPV

Using the table identify the "crossover point" AND briefly describe the significance when thecrossover rate is greater than thecost of capital for mutually exclusive projects. Why is the IRR method less reliable when evaluating mutually exclusive projects?
Discount Rate(%) NPV of Project A NPV of Project B
0

How do mutually exclusive projects compare to independent projects? Can NPV and IRR give conflicting results on occasion? Provide an example to illustrate.

This is a homework problem from ch. 10 of "Corporate Finance: A Focused Approach (2nd ed). Please use the attached template from same book Web site. I can not get same answers as given in class. Please explain steps/formulas, verbage etc in separate Word document if possible. Thank you.
question 10-18:
Gardial Fisherie

Moynihan Motors has a WACC of 10%. The firm is considering two normal, equally risky, but mutually exclusive projects. Project A has an IRR of 15%, while Project B has an IRR of 20%. Which of the following statements is CORRECT?
A. Both projectshave a negative NPV.
B. Since theprojects are mutually exclusiv

This is a multiple choice question.
Jackson Jets is considering two mutually exclusive projects. Theprojectshavethe following cash flows:
Project A Project B
Year Cash Flow Cash Flow
0 -$10,000 -$8,000
1 1,000 7,000
2 2,000 1,000
3 6,000 1,000
4 6,

1.) NPV versus IRR Consider the following two mutually exclusive projects:
Year Cash Flow (X) Cash Flow (Y)
0 -$43,000 -$43,000
1 23,000 7,000
2 17,900 13,800
3 12,400 24,000
4 9,400 26,000
Sketch theNPV profiles for X and Y over a range of discount rates from zero to
25 percent. What is thecrossover rate for these t

Consider the following two mutually exclusive projects:
Year Cash Flow (X) Cash Flow (Y)
0 -$ 19,300 -$ 19,300
1 8,675 9,750
2 8,750 7,625
3 8,625 8,525
Calculate the IRR for each project. (Round your answers to 2 decimal places. (e.g., 32.16)).
IRR
Proj

Capital Budgeting Spreadsheet
Gardial Fisheries is considering two mutually exclusive investments. Theprojects' expected net cash flows are as follows:
Expected net cash flows
Time Project A Project B
0 ($375) ($575)
1 ($300) $190
2 ($200) $190
3 ($1

Cummings Products Company is considering two mutually exclusive investments.
Theprojects' expected net cash flows are as follows:
Expected Net Cash Flows
Year Project A Project B
0 ($300) ($405)
1 (387) 134
2 (193) 134
3 (100) 134
4 600 134
5 600 134
6 850 134
7 (180) 0
a. Construct NPV profiles for Projects A a