For a particular investment project, the present value of the benefits is exactly equal to the present value of the investment. Given this, which of the following statements is true?
A) The project is acceptable.
B) The net present value is positive.
C) The internal rate of return is less than the required rate of return.
D) The profitability index is less than one.

Question

Quizplus · Accepted Answer

When the present value of the benefits equals the present value of the investment, it means the net present value (NPV) is zero. This typically indicates that the project is acceptable because it meets the minimum criteria of not having a negative NPV, suggesting it should earn at least the required rate of return.

For a Particular Investment Project, the Present Value of the Benefits