What is indicated by a Net Present Value of Equity (NPVEquity) that is greater than or equal to zero?

A Net Present Value of Equity (NPVEquity) that is greater than or equal to zero signifies that the present value of the expected future cash flows from an equity investment, discounted back to the present using a required rate of return, is equal to or exceeds the initial amount invested in equity.

When the NPV is zero or positive, it indicates that the investment is generating returns that are at least equal to the opportunity cost of capital — essentially, the return that investors could expect to receive from a comparable investment with a similar risk profile. Thus, this aligns with the investor's return expectations and suggests that the investment meets or exceeds the required rate of return.

The implication is that the investment is likely to be a good decision, as it contributes positively to the investor's wealth, rather than detracting from it. A positive or zero NPV means that the equity investment is viable; it would not make sense for investors to pursue projects with a negative NPV as they would generally fall short of delivering an adequate return relative to their risk.

Other choices do not effectively capture the significance of the NPV. For example, stating that the total revenue exceeds the initial equity investment doesn't necessarily account for the time value of money or the required rate of