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2. Examine the following NPV curve and answer the following questions: 43%, 4,5?8 *mm A was 12.09; 14.05 16.05 18.016 203x "'ml'c 2.8%, (4,26?)...
How do I approach this question? I do not understand how to ascertain whether or not it has a positive/negative NPV from the graph.
2. Examine the following NPV curve and answer the following questions: 43%, 4,5?8 *mm A was 12.09; 14.05 16.05 18.016 203x ”'ml'c" 2.8%, (4,26?)3.6%, -3194 12.3%, (6.158} 6. 3%, [12 ?6} 20.096, (10,199) 20.0%, [10,243'] Figure 1 NPV (a) At a 4.0% cost of capital. is Project A a positive NPV project? Project B? (b) What is the IRR of Project A? Project B? (c) At what cost of capital are the NPVs of the 2 projects roughly equal? (d) Assuming you expect interest rates to remain in the 740% range over the horizon ofthese projects, should you invest in Project A, Project B, or neither? Explain.