Your team was hired to analyse and estimate two alternative investment proposals. The first proposal calls for a major renovation of the companys manufacturing facility. The second involves replacing just a few obsolete pieces of equipment in the facility. The company will choose one project or the other this year, but it will not do both. The cash flows associated with each project appear below and the firm discounts project cash flows at 12%. Renovation Project Replacement Project Initial investment $1,500,000 $600,000 Year Net cash inflows 1 $200,000 $320,000 2 300,000 210,000 3 400,000 120,000 4 600,000 90,000 5 850,000 80,000

Chart the NPV profiles of these projects. For each project, label and interpret the intersection points of the NPV profiles with the x- and y-axes and the crossover point.