If a project has a net present value of £0 when a discount rate of 10 per cent is used, what can be concluded about the rate of return of the project?

Question

Quizplus · Accepted Answer

The net present value of £0 means that the present value of cash inflows is equal to the present value of cash outflows. This implies that the project earns a return equal to the discount rate used, which is 10 per cent. Therefore, the rate of return of the project equals 10 per cent.

If a Project Has a Net Present Value of £0