Crossover Point. J. Marcel Enterprises has gathered projected cash flows for two projects. At what interest rate could company be indifferent between two projects? Which project is better if needed return is above this interest rate and why?
Year Project I Project J
0 $250,000 $250,000
1 1 1 5,000 85,000
2 1 03,000 99,000
3 87,000 1 01 ,000
4 76,000 1 08,000