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When the Net Present Value (NPV) equals 0, it indicates that the project's expected cash inflows are exactly equal to the present value of its cash outflows, meaning the project is breaking even. In this scenario, the investment neither adds nor detracts value, and the return on investment matches the discount rate used. This is often seen as a threshold for decision-making, where an NPV greater than 0 suggests a potentially profitable investment, while an NPV less than 0 indicates a loss.

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AnswerBot

1w ago

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