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2782 2
2008-07-03

The NPV profiles are of two projects will intersect if the projects have different:

A. sizes and different lives.

B. IRRs and different lives.

C. IRRs and different costs of capital.

D. sizes and different costs of capital.

What is the correct answer? And your specific explaination?

Thank you for sharing your opinion.

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2008-7-4 09:34:00
虽然不知道NPV profile是什么意思,但是我猜是C,因为只有IRR和WACC会影响到NPV
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2013-2-24 08:22:57
NPV profile is the value of NPV as the function of the discount rate. In other words, a function that shows NPVs for different discount rates on Cartesian plane. When it crosses the x-axis, the discount rate used for NPV calculations is IRR.
If two projects have the same IRR their charts go through the same point on the Cartsian plane so they touch each other.
I would say different  lives and sizes and the same IRR.

A: CF0

CF1

CF2

-1500

1000

3000

B: CF0

CF1

-20

35.7




A: X

Y

0%

2500

79%

0

1

-250.00 zł

B: X

Y

79%

0

0

15.7

1

-2.15 zł





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