BUSCH

AND ITS
CAPITAL
INVESTMENT
S
NPV PROFILE
The NPV Profile is a graph with the
discountrateon the x-axis and the
NPV of theinvestmenton the y-axis.
Higher discount rates mean
cash flowsthat occur sooner are
more influential to NPV. Since the
earlier payments tend to be the
outflows, the NPV profile generally
shows an inverse relationship
between the discount rate and NPV.
The discount rate at which the NPV
PROFITABILITY INDEX
The ratio of the present
value of a projects future
net cash flows to the
project initial cash flow.