Graphing the NPVs of mutually exclusive projects over different discount rates helps demonstrate:
A) how the incremental IRR varies with changes in the discount rate.
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 payback period 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

Graphing NPVs over different discount rates shows how decisions are made between mutually exclusive projects by identifying which project has a higher NPV at various discount rates.

Graphing the NPVs of Mutually Exclusive Projects Over Different Discount