Plot the npv on the y axis and interest rate on the x axis

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Reference no: EM131234046

1. A project has cash flows of $15,000, $10,000, and $5,000 in 1, 2, and 3 years, respectively. If the prevailing interest rate is 15%, would you buy the project if it costs $25,000?

2. Consider the same project that costs $25,000 with cash flows of $15,000, $10,000, and $5,000. At what prevailing interest rate would this project be profitable? Try different interest rates, and plot the NPV on the y-axis, and the interest rate on the x-axis.

Reference no: EM131234046

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