When evaluated using a nominal rate of 8%, the net present value of a project is zero.Identify which one of the following statements is true.

Question

Quizplus · Accepted Answer

Since the net present value of the project is zero at an 8% nominal rate, at a lower rate of 6% the present value of the project's cash flows would be positive, making the project desirable. Therefore, the project is desirable at both 6% and 8%.

When Evaluated Using a Nominal Rate of 8%, the Net