Find discount rate to equate npv of project b to project a


The Unlimited, national retailing chain, is thinking of investment in one of two mutually exclusive projects. Discount rate used for or Project Ais 12%. Further, Project A costs 15,000 and it would be depreciated by using MACRS. It is anticipated to have the after -tax salvage value of 5,000 at end of six years and to produce after - tax cash flows (including depreciation) of 4,000 for each of the six years. Project B costs 14,815 and wouldal so be depreciated using MACRS. B is anticipated to have the zero salvage value at the end of its six-year life and to produce after - tax cash flows (including depreciation) of 5,100 each year for six years. Discount rate will equate NPV of Project B to that of Project A?

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Mathematics: Find discount rate to equate npv of project b to project a
Reference No:- TGS0867595

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