A project that just breaks even on a financial basis has an IRR equal to its required rate of return.

Question

Quizplus · Accepted Answer

A project that just breaks even on a financial basis has a net present value (NPV) of zero. At this point, the internal rate of return (IRR) of the project is equal to the required rate of return, which is the minimum return that investors require from the project to compensate for the risk involved. Therefore, the IRR would be equal to the required rate of return in this scenario.

A Project That Just Breaks Even on a Financial Basis