If the net present value of a project is $1,000 after using a discount rate of 8%, then one can conclude that the internal rate of return is:

Question

Quizplus · Accepted Answer

If the net present value of a project is positive, then the project is expected to generate returns greater than the discount rate. Since the net present value of this project is $1,000 after discounting at a rate of 8%, the internal rate of return, which is the discount rate at which the net present value would be zero, must be greater than 8%. Therefore, the best choice is C.

If the Net Present Value of a Project Is $1,000