Usually an investment will be profitable if:
A) the internal rate of return is less than the cost of borrowing.
B) the cost of borrowing is equal to the internal rate of return.
C) it is financed with retained earnings.
D) the cost of borrowing is less than the internal rate of return.

Question

Quizplus · Accepted Answer

If the cost of borrowing, represented by the interest rate, is less than the internal rate of return, the investment will generate a positive return and be profitable. This is because the investment's return will be greater than the cost of borrowing, resulting in a net gain. Therefore, choice D is the correct answer.

Usually an Investment Will Be Profitable If