When the rate of return is equal to the discount rate
A) the present value of an investment's benefits must be greater than its cost.
B) the cost of an investment equals the sum of its benefits.
C) the cost of an investment equals the future value of its benefits.
D) the cost of an investment equals the present value of its benefits.

Question

Quizplus · Accepted Answer

When the rate of return equals the discount rate, the present value of the investment's benefits equals its cost, reflecting a break-even situation where the investment neither gains nor loses value over time.

When the Rate of Return Is Equal to the Discount