Q) The net present value profile is a graphical relationship of an investment's: a. market value...

Q) The net present value profile is a graphical relationship of an investment's:

    a.   market value and its time to completion.
   b.   discount rate and its net present value.
   c.   initial cost and its net present value.
   d.   rate of return and its time to completion.
   e.   time to maturity and its net present value.

Expert Solution

Answer: discount rate and its net present value

NPV profile is the graphical representation of the NPV of a project or a set of cash flows at different discount rates, for the firm to assess the profitability of project at different discount rates.

jeff jeffy answered 2 years ago

What is the relationship among present value, net present value, and internal rate of return? Is...

What is the relationship among present value, net present value, and internal rate of return? Is there a consistent relationship at all possible values for these measures?

You are using a net present value profile to compare Project A and B, which are...

You are using a net present value profile to compare Project A and B, which are mutually exclusive. Which one of the following statements correctly applies to the crossover point between these two? A.The internal rate of return of each project is equal to zero. B.The net present values for both projects are the same at a certain discount rate C. The net present value of each project is equal to zero D. The internal rate of return for Project...

What does a net present value profile tell you, and how is it constructed? How does...

What does a net present value profile tell you, and how is it constructed? How does the IRR enter into the net present value profile?

Net Present Value

NBA stars Kevin Durant and Chris Paul own a company that faces a 40% tax rate and uses a 14% discount rate. They just invested $677,000 in equipment for the banking app “Goalsetter” that would be depreciated on a straight-line basis to zero over the 6-year life of the project. The equipment will be salvaged for $182,000 at the end of the project. Kevin Durant and Chris Paul know that the project's operating cash flow will be $165,300 per year. What is the NPV of this project if it...

Net present Value

Company A wishes to invest in 4 projects X, W, Y & Z whose net benefits are given in the table below. Project Years 0 1 2 3 4 W (1000) 1200 0 0 0 X (1361.1) 500 500 500 500 Y (1000) 1200 1500 0 0 Z (2000) 1000 0 0 0 Using a discount rate of 10% appraise the 4 projects using the NPV criteria.

Net Present Value Method, An index computed by dividing the total present value of the net...

Net Present Value Method, An index computed by dividing the total present value of the net cash flow to be received from a proposed capital investment by the amount to be invested.Present Value Index, and Analysis for a service company Continental Railroad Company is evaluating three capital investment proposals by using the net present value method. Relevant data related to the proposals are summarized as follows: Maintenance Equipment Ramp Facilities Computer Network Amount to be invested $679,831 $436,634 $209,605 Annual...

The NPV (net present value) of Plan Alpha is $ (130,539) The NPV (net present value)...

The NPV (net present value) of Plan Alpha is $ (130,539) The NPV (net present value) of Plan Beta is $ 233,001 The IRR (internal rate of return) of Plan Alpha is $ 19.36 %. The IRR (internal rate of return) of Plan Beta is $ 21.25 %. Which plan, if any, should the company pursue? Based on the results above, the company should pursue Plan Beta because the NPV is positive and the IRR is greater than the company's...

Net present value Using a cost of capital of 11%, calculate the net present value for...

Net present value Using a cost of capital of 11%, calculate the net present value for the project shown in the following table and indicate whether it is acceptable, Initial investment (CF 0CF0) negative 1 comma 143 comma 000−1,143,000 Year (t) Cash inflows (CF Subscript tCFt) 1 $81,000 2 $138,000 3 $193,000 4 $258,000 5 $311,000 6 $377,000 7 $270,000 8 $98,000 9 $45,000 10 $29,000 The net present value (NPV) of the project is _____$ (Round to the nearest...

The relationship between a Net Present Value (NPV) and a discount rate could best be described...

The relationship between a Net Present Value (NPV) and a discount rate could best be described as? Direct Random Stochastic Indirect Indeterminant

Find Net Present Value.

Franklin Company is considering investing in two new vans that are expected to generate combined cash inflows of $32,000 per year. The vans’ combined purchase price is $99,000. The expected life and salvage value of each are seven years and $20,100, respectively. Franklin has an average cost of capital of 12 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required Calculate the net present value of the investment opportunity. (Negative amount should be...

Question