If a project has a net present value equal to zero,then:
A)the total of the cash inflows must equal the initial cost of the project.
B)the project earns a return exactly equal to the discount rate.
C)a decrease in the project's initial cost will cause the project to have a negative NPV.
D)any delay in receiving the projected cash inflows will cause the project to have a positive NPV.
E)the project's PI must be also be equal to zero.

Question

Quizplus · Accepted Answer

When a project's net present value (NPV) is zero, it means the project's cash inflows, discounted at the project's discount rate, are exactly equal to the initial investment. This implies the project earns a return exactly equal to the discount rate.

If a Project Has a Net Present Value Equal to Zero,then