question archive Handy Enterprises has gathered projected cash flows for two projects
Handy Enterprises has gathered projected cash flows for two projects
Subject:FinancePrice: Bought3
| Handy Enterprises has gathered projected cash flows for two projects. |
| Year | Project I | Project J |
| 0 | Ac€?o$253,000 | Ac€?o$253,000 |
| 1 | 114,700 | 86,800 |
| 2 | 103,600 | 99,300 |
| 3 | 87,600 | 101,300 |
| 4 | 76,600 | 108,300 |
| Requirement 1: |
|
At what interest rate would the company be indifferent between the two projects? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g.,32.16).) |
| Interest rate | % |
| Requirement 2: |
| Which project is better if the required return is above this interest rate? J or I |
