Elliotbay

Actually it’s very simple.
In the same problem, you’re given the cashflows of the two projects. Take the difference of every two cashflows and input the difference as if it’s a new project. Calculate its IRR and that is your crossover rate.
This is how you solve the problem:
-100 - (-100) = 0 36 - 0 = 36 36 - 0 = 36 36 - 0 = 36 36 - 175 = -139
CF0 = 0
CF1 = 36
CF2 = 36
CF3 = 36
CF4 = -139
Solve for IRR. It will return 13.16%, which is the ratio provided by the key answer.