If the net present value of a project is zero, the project is earning a return...
If the net present value of a project is zero, the project is earning a return equal to:
Multple Choice
Zero
The rate of Inflation.
The accounting rate of return.
The required rate of return.
Homework Answers
If the project has a net present value is Zero, the project is earning as return equal to “ZERO”
-If the project has a net present value is Zero, then the project earns a rate of return exactly equal to the discount rate.
- Net Present Value [NPV] method is the one of the most commonly used method for taking capital budgeting decisions with respect to the investment proposals. The NPV Indicates the value of the investment project or the net worth of the investments to the firm
- Net Present Value [NPV] is the difference between the total present value of the annual cash inflows and present value of the cash outflows
-If the NPV is Zero, it means that the total present value of the annual cash inflows equals the total present value of cash outflows
-The NPV method considers the concept of time value of money for discounting the future cash inflows and it does not provide much information about project risk.
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