A project with an NPV of zero ______________.
A) Should be rejected.
B) Has a proﬁtability index that is greater than one.
C) Is expected to earn a return equal to the ﬁrm's required return.
D) Has a discounted payback period that is shorter than the life of the project.
E) Should be accepted even if the ﬁrm has alternative investments with a positive NPV.

Question

Quizplus · Accepted Answer

A project with an NPV of zero is expected to earn a return equal to the firm's required return. It is not desirable to invest in such a project as it does not add any value to the firm, but it does not necessarily have to be rejected outright.

A Project with an NPV of Zero ______________