You are viewing a graph that plots the NPVs of a project to various discount rates that could be applied to the project's cash flows. What is the name given to this graph?

Question

Quizplus · Accepted Answer

This graph is called the NPV profile, which shows how the NPV of a project changes with different discount rates. By analyzing the NPV profile, analysts can determine the discount rate at which the project has the highest NPV or the rate at which the project breaks even. It helps in evaluating the project's sensitivity to the discount rate, which is a crucial factor that impacts the project's profitability.

You Are Viewing a Graph That Plots the NPVs of a Project