Generally speaking,the IRR should be lower than the hurdle rate.

Question

Quizplus · Accepted Answer

This statement is incorrect. The hurdle rate, also known as the minimum acceptable rate of return, is typically set by the company or investors and serves as the benchmark for evaluating the potential profitability of a project or investment. The IRR, on the other hand, represents the rate at which the project's net present value (NPV) equals zero. In order for a project to be deemed acceptable, its IRR must be equal to or greater than the hurdle rate. Therefore, the IRR should be higher than the hurdle rate, not lower.

Generally Speaking,the IRR Should Be Lower Than the Hurdle Rate