Crossover Rate Template
Crossover Rate Template
This crossover rate template will demonstrate how to calculate the NPV of different projects and plot the NPV profiles to identify the crossover rate.
This is what the crossover rate template looks like:
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Crossover Rate is the rate of return (alternatively called the weighted average cost of capital) at which the Net Present Value (NPV) of two projects are equal. It represents the rate of return at which the net present value profile of one project intersects the net present value profile of another project.
In capital budgeting analysis exercises, the crossover rate is used to show when one investment project becomes superior to another as a result of a change in the rate of return (cost of capital).
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Analyst Certification FMVA® Program
Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
A well rounded financial analyst possesses all of the above skills!
Additional Questions & Answers
CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
- What is financial modeling?
- How do you build a DCF model?
- What is sensitivity analysis?
- How do you value a business?
