Borrowing and lending projects usually can be distinguished by whether:
A)They have positive or negative IRRs
B)The time-zero cash flow is positive or negative
C)Their IRR increases as the discount rate increases
D)Their rate of return is high or low

Question

Quizplus · Accepted Answer

The time-zero cash flow refers to whether the project involves an initial outflow (borrowing) or inflow (lending) of cash. Borrowing projects have a negative time-zero cash flow, while lending projects have a positive time-zero cash flow.

Borrowing and Lending Projects Usually Can Be Distinguished by Whether