If the Net Present Value of a Project Is Zero

question 61

Multiple Choice

If the net present value of a project is zero based on a discount rate of 16%, then the internal rate of return is:

• A) equal to 16%.
• B) less than 16%.
• C) greater than 16%.
• D) cannot be determined from this data.

---

Definitions:

Departmental Income Statement

An income statement that shows the financial performance of different departments within a company.

Net Income

The total profit of a company after all revenues and gains are accounted for and all expenses and losses are deducted.

Direct Expense

Costs that can be directly traced to a specific product, service, or department, and is a key factor in the cost of goods sold.

Indirect Expense

Costs that are not directly attributable to a specific cost object, such as a product or service.