Which one of the following statements is correct about a project with an estimated internal rate of return of negative 100 percent?
A) The net present value of the cash inflows is exactly equal to the initial investment in the project.
B) The estimated sales volume is equal to the cash break-even level of sales.
C) The estimated sales volume is equal to the financial break-even level of sales.
D) The payback period is exactly equal to the life of the project.
E) The net present value of the project is equal to zero.

Question

Quizplus · Accepted Answer

A negative internal rate of return indicates that the project's cash inflows are insufficient to recover the initial investment, meaning the sales volume is at the cash break-even level.

Which One of the Following Statements Is Correct About a Project