What does it mean if IRR equals the cost of capital?

ZTBL OG III Job Related / IRR MCQs — Multiple-choice practice

اگر آئی آر آر سرمائے کی لاگت کے برابر ہو تو اس کا کیا مطلب ہے؟

  1. A. Profit
  2. B. Loss
  3. C. Breakeven
  4. D. High risk

Correct answer

Breakeven

Explanation

Explanation If IRR equals the cost of capital, it means Breakeven. This indicates that the project's returns are just sufficient to cover the cost of capital , resulting in neither profit nor loss. The project is essentially breaking even , and investment in it may not be particularly attractive.

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