Projects that have a zero NPV when the cash flows are discounted at the WACC will provide just sufficient returns to creditors and shareholders.

Question

Quizplus · Accepted Answer

A project that has a zero NPV when the cash flows are discounted at the WACC means that the project is expected to generate returns that are equal to the cost of capital. Therefore, it can provide just sufficient returns to creditors and shareholders.

Projects That Have a Zero NPV When the Cash Flows