NPV profile

NPV profile

A graph of NPV as a function of the discount rate.
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The NPV profile shows the net present value of an investment project at different interest rates.
The steel bridge's flatter NPV profile reflects that the net present value of the steel bridge is more interest rate sensitive than the net present value of the wooden bridge.
Since the marginal efficiency of capital is the discount rate that makes the net present value equal zero, the marginal efficiency of capital is the point at which the NPV profile intersects the y-axis.
In Figure 6 the wooden bridge's NPV profile intersects the y-axis at a higher point than the steel bridge's NPV profile, so the wooden bridge has a higher MEC ranking than the steel bridge.
In Fig 6 the NPV profiles for both variants (SDH and DWDM) are shown.