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NPV Profile and Crossover Rate 600 500 400 300 200 100 0 (100) (200) Project One Project Two Crossover Rate-8.56% 0% 5% 10% 15% 20%

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NPV Profile and Crossover Rate 600 500 400 300 200 100 0 (100) (200) Project One Project Two Crossover Rate-8.56% 0% 5% 10% 15% 20% 25% Which of the following statements is correct? Project 1 has larger cash flows in later time periods than project 2. Project 2 has larger cash flows in later time periods than project 1 There is no way of telling from the graph where the cash flows take place. The price of long term bonds is more sensitive to interest rate changes than the price of short bonds

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