Sketching the npv profile for the investment


NPV and Discount Rates

Response to the following problem:

An investment has an installed cost of $527,800. The cash flows over the four-year life of the investment are projected to be $221,850, $238,450, $205,110, and $153,820. If the discount rate is zero, what is the NPV? If the discount rate is infinite, what is the NPV? At what discount rate is the NPV just equal to zero? Sketch the NPV profile for this investment based on these three points.

 

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Financial Accounting: Sketching the npv profile for the investment
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