A company is pondering an investment project that has an internal rate of return which is equal to the company's discount rate. The profitability index of this investment project is:

A) 0.0
B) 0.5
C) 1.0
D) 1.5

Profitability Index

A financial tool that calculates the relationship between the costs and benefits of a proposed project through its net present value.

Internal Rate Of Return

A metric used in capital budgeting to estimate the profitability of potential investments, calculating the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.

Discount Rate

In the realm of discounted cash flow analysis, this is the interest rate used for estimating the present value of future financial inflows.