When a project's internal rate of return equals its opportunity cost of capital,then the:
A) project should be rejected.
B) project has no cash inflows.
C) net present value will be positive.
D) net present value will be zero.

Question

Quizplus · Accepted Answer

When a project's internal rate of return equals its opportunity cost of capital, the net present value will be zero. This means that the project will neither add nor subtract value from the firm, so it may or may not be accepted depending on other factors such as the company's strategic objectives, available resources, and risk tolerance.

When a Project's Internal Rate of Return Equals Its Opportunity