If a company's required rate of return is 10% and, in using the net present value method, a project's net present value is zero, this indicates that the
A) project's rate of return exceeds 10%.
B) project's rate of return is less than the minimum rate required.
C) project earns a rate of return of 10%.
D) project earns a rate of return of 0%.

Question

Quizplus · Accepted Answer

When the net present value (NPV) of a project is zero, it means that the project's rate of return is exactly equal to the company's required rate of return, which in this case is 10%.

If a Company's Required Rate of Return Is 10% And