Which one of the following statements is correct about a project with an estimated internal rate of return of negative 100 percent?
A) The net present value of the cash inﬂows is exactly equal to the initial investment in the project.
B) The estimated sales volume is equal to the cash break-even level of sales.
C) The estimated sales volume is equal to the ﬁnancial break-even level of sales.
D) The payback period is exactly equal to the life of the project.
E) The net present value of the project is equal to zero.

Question

Quizplus · Accepted Answer

A negative 100 percent IRR implies that the project is losing money, meaning the sales volume is at the cash break-even level, where cash inflows equal cash outflows.

Which One of the Following Statements Is Correct About a Project