Question: Consider the following net present value profile. Net Present Value ($) 400 300 Project L's Net Present Value Profile 200 Crossover Rate = 7.2% 100

 Consider the following net present value profile. Net Present Value ($)
400 300 Project L's Net Present Value Profile 200 Crossover Rate =
7.2% 100 300 Project L's Net Present Value Profile 200 Crossover Rate

Consider the following net present value profile. Net Present Value ($) 400 300 Project L's Net Present Value Profile 200 Crossover Rate = 7.2% 100 300 Project L's Net Present Value Profile 200 Crossover Rate = 7.2% 100 Project S's Net Present Value Profile IRR = 14.5% 1 0 5 7.2 10 r(%) 15 IRR = 11.8% -100 Suppose both projects have same r which is 10%. Project S's NPV is 80 and Project L's NPV is 50. These (Project S & L) are independent projects. Which of the following decision is right? Accept both projects Reject both projects. Accept Project S, but reject Project L. Accept Project L. but reject Project S

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