Mathematics · Financial Mathematics
The present value profile graph of a capital investment project shows a Net Present Value (NPV) of -$20,000 at a 15% cost of capital, and the curve crosses the horizontal axis at 12%. Evaluate these statements: (1) The capital investment amount is $120,000. (2) The Internal Rate of Return (IRR) is more than 15%.
- 1Statement 1 is false, statement 2 is true
- 2Statement 1 is true, statement 2 is false
- 3Both statements are false✓
- 4Both statements are true
Correct answer
Both statements are false
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