Question

At what interest rate would the company be indifferent between the two projects?

J. Marcel Enterprises has gathered projected cash flows for two projects.

Year Project I Project J
0 –$250,000 –$250,000
1 115,000 85,000
2 103,000 99,000
3 87,000 101,000
4 76,000 108,000

Requirement 1:
At what interest rate would the company be indifferent between the two projects?

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