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5. NPV profiles An NPV profile plots a project's NPV at various costs of capital, labeled A and B in the graph. A project's NPV

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5. NPV profiles An NPV profile plots a project's NPV at various costs of capital, labeled "A" and "B" in the graph. A project's NPV profile is shown as follows. Identify the range of costs (ranges labeled "A" and "B") of capital that a firm would use to accept and reject this project. NPV Dollars) 400 300 200 100 B -100 -200 2 4 6 8 10 12 14 16 18 20 COST OF CAPITAL (Percent 02 4 6 8 10 12 14 16 18 20 COST OF CAPITAL (Percent B Reject This NH Accept Demonstrates that as the cost of capital increases, the project's NPV Reject Accept - decreases increases This NPV profile demonstrates that as the cost of capital increases, the project's NPV

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