I am needing help with the excel formulas for the following
question (the cells highlighted in green.)
Problem 1.
West Coast Company is considering two mutually exclusive projects,
the project's expected net cash flows are as follows:
Expected Cash Flows
Year
Proj. A
Proj. B
0
($40,000)
($30,000)
1
($12,000)
$8,500
2
$10,000
$8,500
3
$35,000
$8,500
4
$14,000
$8,500
5
$25,000
$8,500
Required Rate of Return
14.00%
14.00%
1.c. (8 points)
Calculate the crossover rate of these two
projects.
Year
Proj. A
Proj. B
Cash Flow Difference between Proj. A & Proj.
B
0
1
2
3
4
5
Crossover rate