Graphing the crossover point helps explain:
A) Why one project is always superior to another project.
B) How decisions concerning mutually exclusive projects are derived.
C) How the duration of a project affects the decision as to which project to accept.
D) How the net present value and the initial cash outﬂow of a project are related.
E) How the proﬁtability index and the net present value are related.

Question

Quizplus · Accepted Answer

The crossover point on a graph indicates where two projects have the same net present value, helping to determine which project is preferable when they are mutually exclusive.

Graphing the Crossover Point Helps Explain