Londo Company has a zero net present value based on a 10% cost of capital.What is the expected rate of return for this project?

Question

Quizplus · Accepted Answer

When a project has a zero net present value (NPV) at a certain cost of capital, it means that the expected rate of return from the project is exactly equal to the cost of capital. In this case, since the cost of capital is 10%, the expected rate of return is also 10%.

Londo Company Has a Zero Net Present Value Based on a 10