The y-intercept of a net present value (NPV)profile is the algebraic sum of the project cash flows, since the discount rate is zero at that point.

Question

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The y-intercept of a net present value (NPV) profile is the sum of all cash flows at time zero (i.e. the initial investment), and at a discount rate of zero, all future cash flows would have the same value as their present values. Therefore, the sum of all cash flows at time zero would be equal to the y-intercept.

The Y-Intercept of a Net Present Value (NPV)profile Is the Algebraic