In dealing with IRR and NPV project evaluations, there is something called a crossover rate. Using the data below, graph and identify the crossover rate. What is this crossover rate and why is it important?YearProject Y Cash FlowProject Z Cssh Flow0($36,000)= initial investment($40,000)= initial investment1$10,000$23,0002$10,000$18,0003$10,000$3,0004$10,000$3,0005$10,000$3,000

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 21P

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In dealing with IRR and NPV project evaluations, there is something called a crossover rate. Using the data below, graph and identify the crossover rate. What is this crossover rate and why is it important?

Year	Project Y Cash Flow	Project Z Cssh Flow
0	($36,000)= initial investment	($40,000)= initial investment
1	$10,000	$23,000
2	$10,000	$18,000
3	$10,000	$3,000
4	$10,000	$3,000
5	$10,000	$3,000

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