NPV profile of two mutually exclusive projects. Moulton Industries has two potential projects for the coming year, Project B-12 and Project F-4. The two projects are mutually exclusive. The cash flows are listed in the following table: Draw the NPV profile of each project, and determine their crossover rate. If the appropriate hurdle rate is 8% for both projects, which project does Moulton Industries choose? Which of the graphs below best fits the NPV profiles of the projects? Click on the magnifying glass icon to see an enlarged version of each graph.

NPV in millions of dollars NPV in millions of dollars NN O O O O .LOL TTTTTTTT TTTTTTTTTTTTTTTTT LLLLLLLLLLLLLLLLL LLLLLLLLLLLLL LLLLLLLLLLLLLLLLLLL HILTILLITENLILLLLLLLLLLLLLLL NILILILILONIL TELLIIIIIIIIIIIIIIIIIIIIIIIL IN IIIIIIIIII III WIIIIII IIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIII LILLE V 4 6 8 Discount rates (%) Discount rates (%) 14 16 10 12 14 16 18 20 22 24 I LIIIIIIIIIIIIIIIII IIIIIIIIIIIIII LITTIIIIIIIIIIIIIIIII LLLLLLL 18 20 22 TI IIIIIIIIII OD NPV in millions of dollars NPV in millions of dollars LLLLLLLL TTTTTTTTTTTTTTTTTT TUTTI TUTTI HIIHII LINNA 100 2 UTRIENTIERI IIIIIIIID LITIES FI 4 6 8 Discount rates (%) Discount rates (%) 14 16 10 12 14 16 18 20 22 24 18 20 22 24 NUTRITITIRIRIIETEIRITTI LLLLLLLLL LLLLLLLLLLLLLLLLLLLLLLLLL LILIT NIINNNIIIIIIIIIIIII LLLLLLLLLL TIELLILLLLLL LILILIT LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL TELLILIHIIIIIIIIIIIIIIIIIIIIEN TEISIBIRINTILIITRITHILI TIRILDI TIINIIIIIIIIIIIIIIIIIIIIIII IIIIIIIIIN NIIIIIIIIIIIIIIIIII TRILIIIIIIINNNIIIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIII NPV in millions of dollars NPV in millions of dollars NN O O O O .LOL TTTTTTTT TTTTTTTTTTTTTTTTT LLLLLLLLLLLLLLLLL LLLLLLLLLLLLL LLLLLLLLLLLLLLLLLLL HILTILLITENLILLLLLLLLLLLLLLL NILILILILONIL TELLIIIIIIIIIIIIIIIIIIIIIIIL IN IIIIIIIIII III WIIIIII IIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIII LILLE V 4 6 8 Discount rates (%) Discount rates (%) 14 16 10 12 14 16 18 20 22 24 I LIIIIIIIIIIIIIIIII IIIIIIIIIIIIII LITTIIIIIIIIIIIIIIIII LLLLLLL 18 20 22 TI IIIIIIIIII OD NPV in millions of dollars NPV in millions of dollars LLLLLLLL TTTTTTTTTTTTTTTTTT TUTTI TUTTI HIIHII LINNA 100 2 UTRIENTIERI IIIIIIIID LITIES FI 4 6 8 Discount rates (%) Discount rates (%) 14 16 10 12 14 16 18 20 22 24 18 20 22 24 NUTRITITIRIRIIETEIRITTI LLLLLLLLL LLLLLLLLLLLLLLLLLLLLLLLLL LILIT NIINNNIIIIIIIIIIIII LLLLLLLLLL TIELLILLLLLL LILILIT LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL TELLILIHIIIIIIIIIIIIIIIIIIIIEN TEISIBIRINTILIITRITHILI TIRILDI TIINIIIIIIIIIIIIIIIIIIIIIII IIIIIIIIIN NIIIIIIIIIIIIIIIIII TRILIIIIIIINNN