If a project has an internal rate of return of 14 per cent and a positive net present value,which of the following statements is true regarding the discount rate used for the net present value computation?

Question

Quizplus · Accepted Answer

If a project has a positive net present value and an internal rate of return greater than the discount rate, then the discount rate must be lower than the internal rate of return. Therefore, if the project has an internal rate of return of 14 per cent, the discount rate used for the net present value computation must have been less than 14 per cent.

If a Project Has an Internal Rate of Return of 14