Project S has an initial cost of $10,000 and produces annual cash flows of $3,000 for five years. Project L has an initial cost of $25,000 and generates annual cash flows of $7,000 for five years. The two projects are mutually exclusive. What is the cross-over rate for these two projects?
a. 16.25%
b. 15.25%
c. 14.25%
d. 10.42%
e. The crossover rate does not exist for these two projects
