A firm would accept a project with a net present value of zero because
A) the project would maintain the wealth of the firm's owners.
B) the project would enhance the wealth of the firm's owners.
C) the return on the project would be positive.
D) the return on the project would be zero.

Question

Quizplus · Accepted Answer

A project with a net present value of zero means that the project's expected cash inflows and outflows would cancel each other out, resulting in no gain or loss. However, the project would maintain the current wealth of the firm's owners. Therefore, the firm would still accept the project as it does not decrease their wealth.

A Firm Would Accept a Project with a Net Present