- Graphic presentation.
5.1. Graphically, the situation can be represented as follows. In the graph given
below, the curve cuts the OX axis at 10.22 %, showing NPV = 0. If the cost
of capital were 9%, (NPV > 0), the benefits would exceed the cost. The gap
between the 9% and 10.22 % is the margin of safety. Conversely, if the cost
of capital were 11 % (NPV < 0), the costs would exceed the benefit.Discounted Cash Flow Technique
1 0.22%O 9% (^) 11%
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