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A Firm Has Found That the Net Present Value of a Project

Question 1

Multiple Choice

A firm has found that the net present value of a project is equal to zero. The net present value was calculated using the firm's risk-adjusted discount rate of 15%. Based on this information, your conclusion is


A) the internal rate of return on the project is greater than 15%.
B) the internal rate of return on the project is equal to 15%.
C) the internal rate of return on the project is less than 15%.
D) the internal rate of return on the project may be greater than, equal to, or less than 15% depending on which method was used to adjust the firm's discount rate for risk.

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