Difference between revisions of "Crossover rate"
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| − | + | [[Crossover rate]] is the cost of capital at which the NPV profiles for two projects intersect. | |
==Definitions== | ==Definitions== | ||
According to [[Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition)]], | According to [[Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition)]], | ||
| − | : | + | :[[Crossover rate]]. The cost of capital at which the NPV profiles for two projects intersect. |
| + | According to [[Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition)]], | ||
| + | :[[Crossover rate]]. The cost of capital at which the [[NPV]] profiles of two projects cross and, thus, at which the projects' [[NPV]]s are equal. | ||
==Related concepts== | ==Related concepts== | ||
Latest revision as of 03:49, 2 November 2019
Crossover rate is the cost of capital at which the NPV profiles for two projects intersect.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Crossover rate. The cost of capital at which the NPV profiles for two projects intersect.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Crossover rate. The cost of capital at which the NPV profiles of two projects cross and, thus, at which the projects' NPVs are equal.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
