If a project has a net present value equal to zero, then any delay in receiving the projected cash
inﬂows will cause the project to have a negative net present value.

Question

Quizplus · Accepted Answer

If the net present value (NPV) is equal to zero, it means that the present value of the cash inflows equals the present value of the cash outflows. Therefore, any delay in the cash inflows will reduce the present value of those cash inflows and result in a negative NPV. This is because the opportunity cost of waiting for the cash inflows to arrive increases, leading to a lower valuation of the project.

If a Project Has a Net Present Value Equal to Zero