Which of the below is indicated by the crossover point where two NPV profiles intersect? a.The cost
Question:
Which of the below is indicated by the crossover point where two NPV profiles intersect?
a.The cost of capital that would make us indifferent between the two projects
b.The IRR
c.The payback period
If the payback measure for a particular project is shorter than the life of the project then
a.The NPV measure could be smaller than zero, greater than zero, or equal to zero.
b.The NPV measure must be greater than zero.
c.The NPV measure cannot be equal to zero.
On the net present value profile diagram showing two mutually exclusive projects with positive net present values, the mutually exclusive project with the curve that is _________ should be rejected.
a.Positioned below the horizontal axis at the appropriate cost of capital rate
b.Positioned above the horizontal axis at the appropriate cost of capital rate
c.Positioned lower on the diagram than the other project, at the appropriate cost of capital rate