A project has an internal rate of return which is equal to the company's discount rate. The project's profitability index

Question

Quizplus · Accepted Answer

If a project's IRR is equal to the company's discount rate, then the NPV of the project would be zero. In this case, the profitability index would be equal to 1 (i.e. PV of cash inflows / PV of cash outflows = 1), which indicates that the project is expected to break even.

A Project Has an Internal Rate of Return Which Is