The blue curve (labeled "L") depicts the NPV for a project with larger cash flows later of -$1,000, $100, $300, $400, and $675. The red curve (labeled "S") depicts the NPV for a project with larger cash flows sooner of -$1,000, $500, $400, $300, and $100. Drag on the graph either left or right to change the cost of capital interest rate at which the NPV is evaluated for the two projects. Project S: NPVCF++ = -$1,000+ $500 (1+0.1000) $400 $300 + (1+0.1000)2 (1+0.1000) + + $100 (1+0.100074 = $78.82 Project L: NPV = CF0 + += 1 (1+0) N CFt = -$1,000 + $100 (1+0.1000) + + $300 $675 (1+0.1000)2 (1+0.1000) (1+0.1000)* $400 + = $100.40 NPV ($) 500 400 L 300 S 200 100.40100 78.82 0 5 10 15 20 -100 Cost of Capital (%)