If a project is assigned a required rate of return equal to zero,then:
A) the timing of the project's cash flows has no bearing on the value of the project.
B) the project will always be accepted.
C) the project will always be rejected.
D) whether the project is accepted or rejected will depend on the timing of the cash flows.
E) the project can never add value for the shareholders.

Question

Quizplus · Accepted Answer

If the required rate of return is zero, the present value of future cash flows is simply their sum, so timing does not affect the project's value.

If a Project Is Assigned a Required Rate of Return