In: Finance
Cooper Electronics uses NPV profiles to visually evaluate competing projects. Key data for the two projects under consideration are given in the following table: Using these data, graph, on the same set of axes, the NPV profiles for each project using discount rates of 0%, 8%, and the IRR.
Initial investment $30,000 $25,000
Year Operating cash inflows
1 $7,000 $6,000
2 $10,000 $9,000
3 $12,000 $9,000
4 $10,000 $8,000