You Are Using a Net Present Value Profile to Compare

question 41

Multiple Choice

You are using a net present value profile to compare Projects A and B, which are mutually exclusive.Which one of the following statements correctly applies to the crossover point between these two?

• A)The internal rate of return for Project A equals that of Project B, but generally does not equal zero.
• B)The internal rate of return of each project is equal to zero.
• C)The net present value of each project is equal to zero.
• D)The net present value of Project A equals that of Project B, but generally does not equal zero.
• E)The net present value of each project is equal to the respective project's initial cost.

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