ng cengage.com/st 7&nbNodeld;:20 759502 7&deploymentid-55; 1 651 301 74650501 19

Question

ng cengage.com/st 7&nbNodeld;:20 759502 7&deploymentid-55; 1 651 301 74650501 190349062&etsen.; 9781 305635075 &parentid-207595402; MINDTAP Assignment 11- The Basics of Capital Budgeting ® Due on Dec 3 at 11 PM CST S. NPV profiles Aa Aa An NPV profle piots a project's NPV at various costs of capital. A project's NPV profile is shown as follows. Identify the range of costs of capital that a firm would use to accept and reject this project. NPV Dollarsl 400 300 200 Accept 100 Reject -100 200 0 2469 10 12 14 1610 20 COST Percent OF CAPITAL This NPV profile demonstrates that as the cost of capital increases, the project's NPV Desktop ” &*

Explanation / Answer

At 12% Cost of Capital NPV = 0. Therefore range of cost of capitalis 0% to 12%.

With the increase in cost of capital NPV decreases

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