Assume both the discount and tax rates are positive values. At the financial break-even point, the:
A) payback period equals the project's life.
B) NPV is negative.
C) OCF is zero.
D) contribution margin per unit equals the fixed costs per unit.
E) IRR equals the required return.

Question

Quizplus · Accepted Answer

At the financial break-even point, the internal rate of return (IRR) equals the required return. This means the project generates a return exactly equal to the cost of capital, making it financially neutral to undertake.

Assume Both the Discount and Tax Rates Are Positive Values