Shelby- NPV and Cost of capital
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Shelby Inc. is considering two projects which have the following cash flows:
Year Project 1
Cash Flow Project 2
Cash Flow
0 -$2,000 -$1,900
1 500 1,100
2 700 900
3 800 800
4 1,000 600
5 1,100 400
At what cost of capital would the two projects have the same net present value?
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Solution Summary
The solution calculates the cost of capital at which two streams of cash flows has the same NPV
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