An NPV of zero implies that an investment's ____________.
A) Cost exceeds the present value of its cash inﬂows.
B) Cost is equal to the present value of its cash inﬂows.
C) IRR is greater than the ﬁrm's required rate of return.
D) Present value of cash inﬂows are positive.
E) Present value of cash inﬂows exceed the investment's cost.

Question

Quizplus · Accepted Answer

An NPV of zero means that the present value of a project's cash inflows is equal to its initial cost. This implies that the project will neither add nor reduce the value of the company.

An NPV of Zero Implies That an Investment's ____________