A net present value of zero implies that an investment:
A)has an initial cost of zero
B)has cash inflows which have a zero present value
C)has no expected impact on shareholders
D)does not pay back its initial cash outlay
E)has a profitability index that is less than 1.0

Question

Quizplus · Accepted Answer

A net present value (NPV) of zero means that the investment is expected to generate cash flows that exactly cover the initial investment cost, resulting in no net gain or loss for shareholders.

A Net Present Value of Zero Implies That an Investment