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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