If a project is assigned a required rate of return equal to zero, then:
A) The timing of the project's cash ﬂows has no bearing on the value of the project.
B) The project will always be accepted.
C) The project will always be rejected.
D) Whether the project is accepted or rejected will depend on the timing of the cash ﬂows.
E) The project can never add value for the shareholders.

Question

Quizplus · Accepted Answer

If the required rate of return is zero, the timing of cash flows does not affect the project's value because there is no discounting involved.

If a Project Is Assigned a Required Rate of Return