Without using formulas, provide a deﬁnition of net present value proﬁle.
A) A graphical representation of the relationship between varying rates of return and the corresponding NPV value.
B) A situation whereby a choice has to be made between two or more projects, and choosing multiple projects is not an option
C) The rate of return provided by a project. The value is compared with a company's rate of return to determine viability of a project.
D) A project analysis tool that measures the acceptability of a project through the difference between a project's initial investment and whether the present value of its cash ﬂow will
Repay the investment.
E) A project analysis tool that measures the acceptability of a project by determining the amount of proﬁt that can be expected based on an investment made.

Question

Quizplus · Accepted Answer

The net present value profile is a graphical representation of the relationship between varying rates of return and the corresponding NPV value. It helps in evaluating the feasibility of a project by analyzing the impact of changes in the discount rate on its net present value.

Without Using Formulas, Provide a Deﬁnition of Net Present Value