A project has a net present value of zero. Which one of the following best describes this project?
The project has a zero percent rate of return.
The project requires no initial cash investment.
The project has no cash flows.
The summation of all of the project's cash flows is zero.
The project's cash inflows equal its cash outflows in current dollar terms.

Question

09-04-2019
Business

contestada

A project has a net present value of zero. Which one of the following best describes this project?
The project has a zero percent rate of return.
The project requires no initial cash investment.
The project has no cash flows.
The summation of all of the project's cash flows is zero.
The project's cash inflows equal its cash outflows in current dollar terms.

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MrsTriplet MrsTriplet · Answer 1 · 2019-04-10T17:05:30+02:00

Answer: The project's cash inflows equal its cash outflows in current dollar terms.

Explanation: The net present value shows a sum of money used to determine what may happen if the money was invested. Net present value or NPV, is show by taking the present value and subtracting it from the present value over a period of time. If there is a NVP of zero, then the input and output equal each other because of them being at a zero.