OPTIONS ARE: A(Accept/Reject), B(Accept/Reject), The point at which the NPV profile intersects the horizontal axis represents the(IRR/WACC)

Attempts Keep the Highest / 2 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 A 100 0 B -100 -200 0 2 4 6 8 10 12 14 16 18 20 COST OF CAPITAL (Percent) A B The point at which the NPV profile intersects the horizontal axis represents the