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Given the following: Project A: CF, = -$23,560; CF1 = $6,700; CF2 = $9,200; CF3 = $15,800 Project B: CF = -$19,860; CF1 = $4,
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Answer #1

crossover is the IRR of the difference in cashflows of the 2 projects and can be calculated as below.

Year Project A Project B A-B
0 -23,560 -19,860 -3,700
1 6700 4,140 2,560
2 9200 8,110 1,090
3 15800 15,160 640
IRR 10.18%
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