When a project's internal rate of return equals the discount rate,
A)the analysis should be ranked against other projects.
B)the net present value is zero.
C)the discount rate is greater than zero.
D)the discount rate is greater than the internal rate of return.

Question

Quizplus · Accepted Answer

When a project's internal rate of return equals the discount rate, the net present value becomes zero. This implies that the project will neither generate any profit nor will have any losses. Therefore, it is not considered profitable and should be rejected.

When a Project's Internal Rate of Return Equals the Discount