Which of the following best describes the NPV profile?
A) A graph of a project's NPV as a function of possible IRRs.
B) A graph of a project's NPV over time.
C) A graph of a project's NPV as a function of possible capital costs.
D) None of the statements are correct.

Question

Quizplus · Accepted Answer

The NPV profile is a graph that shows a project's NPV as a function of various discount rates (which could be interpreted as the cost of capital). It helps in understanding how the value of a project changes with different assumptions about the discount rate.

Which of the Following Best Describes the NPV Profile