Which of the following statements is CORRECT?
A) the npv profile graph for a normal project will generally have a positive (upward) slope as the life of the project increases.
B) an npv profile graph is designed to give decision makers an idea about how a project's risk varies with its life.
C) an npv profile graph is designed to give decision makers an idea about how a project's contribution to the firm's value varies with the cost of capital.
D) we cannot draw a project's npv profile unless we know the appropriate cost of capital for use in evaluating the project's npv.
E) an npv profile graph shows how a project's payback varies as the cost of capital changes.
Correct Answer:
Verified
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