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Managerial Accounting

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What Does Zero NPV Mean for a Project?

MGRACT-S5ZWEB

In using the net present value (NPV) method for evaluating a long-term potential project, what does a zero NPV tell us about the project?

A

The profits are at breakeven.

B

The project's total future cash flows are equal to the initial outlay.

C

The required rate of return is 0%.

D

The project's rate of return equals the required rate of return.