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A Company That Is Using the Internal Rate of Return

Question 7

Multiple Choice

A company that is using the internal rate of return (IRR) to evaluate projects should accept a project if its IRR:


A) is greater than the hurdle rate.
B) is greater than or equal to the firm's hurdle rate.
C) is greater than zero.
D) is less than the firm's cost of investment capital.
E) equates the present value of the project's cash inflows with the present value of the project's cash outflows.

Correct Answer:

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