Question: What does it mean when a capital budgeting project has an NPV of zero? The projects IRR will be less than the required hurdle rate

What does it mean when a capital budgeting project has an NPV of zero?

  • The projects IRR will be less than the required hurdle rate for the project
  • The firms stockholders will earn a positive return, but it will be less than their required return, given the risk of the investment
  • The firms security holders will earn their required rate of return, given the risk of the investment
  • The firms stockholders will earn a negative return
  • none of the above

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