# NPV Profile

**Topics:**Net present value, Internal rate of return, Cash flow

**Pages:**2 (298 words)

**Published:**November 2, 2014

Required Return8.25%Required Return8.25%

Cash FlowsPeriod Cash FlowsCash FlowsPeriod Cash Flows Initial Outlay-8,5000-8,500Initial Outlay-9,5000-9,500

13,60013,900

22,40022,900

32,85032,900

45,20045,550

Discounted Payback Period3.23Discounted Payback Period3.28 NPV$2,907.51 NPV$2,905.64

Profitability Index1.3421Profitability Index1.3059

IRR21.88%IRR20.62%

MIRR16.51%MIRR15.72%

Crossover Rate8.16%

NPV Profile DataNPV Profile Data

Required ReturnNPV ARequired ReturnNPV B

0%$5,550.000% $5,750.00

5%$3,845.435% $3,915.80

10%$2,449.1210% $2,411.69

15%$1,292.2215% $1,164.15

20%$323.6920% $118.63

25%-$494.8825% $(765.92)

30%-$1,192.7630% $(1,520.83)

35%-$1,792.5535% $(2,170.28)

For Project A, anything under 21.88% is acceptable and for Project B, anything under 20.62% is acceptable. The crossover rate, where the NPVs are the same is 8.16%. Project AProject B

Required Return8.25%Required Return8.25%

Cash FlowsPeriod Cash FlowsCash FlowsPeriod Cash Flows Initial Outlay-8,5000-8,500Initial Outlay-9,5000-9,500

13,60013,900

22,40022,900

32,85032,900

45,20045,550

Discounted Payback Period3.23Discounted Payback Period3.28 NPV$2,907.51 NPV$2,905.64

Profitability Index1.3421Profitability Index1.3059

IRR21.88%IRR20.62%

MIRR16.51%MIRR15.72%

Crossover Rate8.16%

NPV Profile DataNPV Profile Data

Required ReturnNPV ARequired ReturnNPV B

0%$5,550.00...

Please join StudyMode to read the full document