In financial analysis, a cash-on-cash return of 1.0x indicates what?

A cash-on-cash return of 1.0x signifies that the cash inflows generated by an investment are equal to the cash outflows initially invested. Specifically, this means that the investor has recovered their initial investment amount, thus breaking even.

This measurement is commonly used to evaluate real estate investments and indicates a scenario where the income produced from the investment matches the capital that was put in. When the cash-on-cash return is at this level, it reflects a neutral outcome where the investor has not lost money, but they also have not made any profit beyond the original investment amount.

In contrast, other options present outcomes that do not align with the meaning of a cash-on-cash return of 1.0x. For example, if all profits had been distributed or if the investment value had doubled, a different cash-on-cash return would be indicated, reflecting gains above the initial investment. Similarly, a failed investment would generally show a cash-on-cash return below 1.0x, indicating losses relative to the investment made.