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. Using
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.
TABLE
Terra Firma
Initial investment 25,000 27,000
Year Operating cash inflows
1 9,000 6,000
2 7,000 12,000
3 12,000 7,000
4 8,000 10,000
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