NPV and Discount Rates An investment has an installed cost of €700,000. The cash flows over the four-year life of the investment are projected to be €250,000, €300,000,

€225,000 and €175,000. If the discount rate is zero, what is the NPV? If the discount rate is infinite, what is the NPV? At what discount rate is the NPV just equal to zero?

Sketch the NPV profile for this investment, based on these three points.