A project NPV profile graph intersects the Y Axis at 0% cost of capital and intersects the x-axis at the project's (where NPV = 0). The Y axis .intersects point represents the project's undiscounted NPV. Point at which 2 project's profile cross one another is the crossover rule The crossover rate can be found by calculating the of the differences in the project's cash flows (Project Delta). A profile indicates that increases in the cost capital lead to large declines in NPV. If a project that most of its cash flows coming .in later years, its NPV will sharply if the cost of capital increases; but a profile whose cash flows come earlier will not be severally penalized by high capital costs. The significant of the crossover rate is that at any cost of capital than the crossover rate, the npv and IRR method which provide the same conclusion for evaluating mutually exclusive projects. However at any cost of capital than the crossover rate, the NPV and the IRR method's will conflict. In that situations, the method will always provide the correct project acceptance results. Qualitative problem: Linear Industrial is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both project's after the cash flows are shown in the time line below. Depreciation, salvage, not operating working capital requirements, and tax effects are all include in these cash flows. Both project's have 4-years lives, and they have risk characteristics similar to the firm's average project. Bellinager's Wacc is 12%. What is project Delta's IS IRR? Do not round intermediate calculations, What is the significant of this IRR? It is the after this project when mutually inductive project are considered there is project acceptance between the NPV and IRR approaches. Review the graphs below. Select the graph that correctly represents the correct NPV profile for projects A and B by using following drop down menu