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If the net present value (NPV) of a project is zero, it means that the project is expected to generate exactly enough cash flows to cover the initial investment and provide the required rate of return. At an NPV of zero, the project's benefits equal its costs, indicating that it is neither creating nor destroying value for the organization. In this case, the decision to proceed with the project would depend on other factors such as strategic alignment, risk considerations, and potential qualitative benefits.

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1y ago

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When a project npv exceeds zero?

When a project's Net Present Value (NPV) exceeds zero, it indicates that the projected earnings (in present value terms) from the project surpass the expected costs, also in present value terms. This suggests that the project is likely to generate value for the investors and is considered a good investment opportunity. A positive NPV implies that the project is expected to contribute to the overall wealth of the stakeholders. Consequently, it is generally recommended to proceed with projects that have an NPV greater than zero.


What is the value of 0 in 601099?

Zero has a value of zero wherever it happens to be.


What is the value of the zero in the decimal number 11.509?

Zero has a value of zero no matter where it's placed. In this example, it happens to be in the hundredths place.


If an investment project has a positive net present value then the internal rate of return is?

Positive present value indicates a successful investment. In terms of rate of return, a positive present value basically indicates that returns will be higher than the specified rate of return. Zero present values mean returns will meet your specified rate exactly. Negative present values mean returns will be less than required.


What is the meaning of the term net present value?

Net Present Value (NPV) means the difference between the present value of the future cash flows from an investment and the amount of investment.Present value of the expected cash flows is computed by discounting them at the required rate of return. For example, an investment of $1,000 today at 10 percent will yield $1,100 at the end of the year; therefore, the present value of $1,100 at the desired rate of return (10 percent) is $1,000. The amount of investment ($1,000 in this example) is deducted from this figure to arrive at net present value which here is zero ($1,000-$1,000).A zero net present value means the project repays original investment plus the required rate of return. A positive net present value means a better return, and a negative net present value means a worse return.


What happens to the graph when x is nearly zero?

When x is nearly zero,y increases in value.


What happens when a absolute value equation equals to zero?

it gets bigger


PV of 31 year zero coupon bond with a YTM of 8 par Value 1000?

present value zero coupon=1000/(1.08)31


When the inflation rate is zero is the present value of one dollar is identical to the future value of one dollar?

Yes.


What is the NPV of a project that has an IRR exactly equal to its cost of capital?

If a project's internal rate of return (IRR) is exactly equal to its cost of capital, the net present value (NPV) of the project is zero. This means that the project's cash inflows, discounted at the cost of capital, exactly match the initial investment, resulting in no net gain or loss. Consequently, the project neither adds nor subtracts value to the investment. Thus, it is considered a break-even scenario in terms of financial viability.


What is the value of zero?

The value of zero is zero. Zero is always going to have a value of zero.


What would happen to the npv and pi for each project if the required rate of the return increased?

If the required rate of return increases, the Net Present Value (NPV) of each project would typically decrease, as future cash flows are discounted at a higher rate, reducing their present value. The Profitability Index (PI), which is the ratio of the present value of cash inflows to the initial investment, would also decline if NPV drops below zero. Consequently, projects that were previously deemed acceptable may become unviable, leading to a potential reevaluation of investment decisions.