Suppose a project requires an initial investment of $1,000 and it will yield $1,050 one year later.The NPV of the project is:
A)Equal to $50
B)less than 0 if the discount rate is less than 5 percent
C)Zero if the discount rate is equal to 5 percent
D)Positive if the discount rate is greater than 5 percent

Question

Quizplus · Accepted Answer

The NPV is zero when the discount rate equals the rate of return, which is 5% in this case.

Suppose a Project Requires an Initial Investment of $1,000 and It