Problem: Finance NPV Graph
Use the project cash flows for the two mutually exclusive projects shown below to answer the following two questions.
Time Project A Cash Flow Project B Cash Flow
0 -$725 -$850
1 100 200
2 250 200
3 250 200
4 200 200
5 100 200
6 100 200
7 100 200
1) NPV Profiles Graph the NPV profiles for both projects on a common chart, making sure that you identify all of the "crucial" points.
2) IRR Applicability For what range of possible interest rates would you want to use IRR to choose between these two projects? For what range of rates would you NOT want to use IRR?
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.