Encyclopedia of Finance

2006 Edition
| Editors: Cheng-Few Lee, Alice C. Lee

Derivation of crossover rate

  • Cheng-Few Lee
  • Alice C. Lee
Reference work entry
DOI: https://doi.org/10.1007/978-0-387-26336-6_79

Suppose there are 2 projects under consideration. Cash flows of project A, B and B - A are as follows:

Period

0

1

2

3

Project A

−10 500

10 000

1000

1000

Project B

−10 500

1000

1000

12 000

Cash flows of B - A

0

− 9000

0

11 000

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Copyright information

© Springer Science+Business Media, Inc. 2006

Authors and Affiliations

  • Cheng-Few Lee
    • 1
  • Alice C. Lee
    • 2
  1. 1.Rutgers UniversityNew Brunswick/PiscatawayUSA
  2. 2.San Francisco State UniversitySan FranciscoUSA