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Author Question: Which statement about an NPV profile graph is true? (Read 42 times)

vowens

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Which statement about an NPV profile graph is true?

An NPV profile graph shows how a project’s IRR varies as the cost of capital changes.


An NPV profile graph is designed to give decision makers an idea about how a project’s contribution to the firm’s value varies with the cost of capital.


We cannot draw a project’s NPV profile unless we know the appropriate WACC for use in evaluating the project’s NPV.


The NPV profile graph for a normal project will generally have a negative (downward) slope as the life of the project increases.



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Marked as best answer by vowens on Aug 7, 2023

SphnxKickin

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vowens

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Reply 2 on: Aug 7, 2023
YES! Correct, THANKS for helping me on my review


bulacsom

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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