Question: Cooper Electronics uses NPV profiles to visually evaluate competing projects. Key data for the two projects under consideration are given in the following table: .
Cooper Electronics uses NPV profiles to visually evaluate competing
projects.
Key data for the two projects under consideration are given in the following table:
.
| Terra | Firma |
| ||
| Initial investment | $22,000 | $23,000 | ||
| Year | Operating cash inflows | |||
| 1 | $9,000 | $6,000 | ||
| 2 | $8,000 | $6,000 | ||
| 3 | $6,000 | $8,000 | ||
| 4 | $6,000 | $12,000 | ||
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 (find each of these).
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