When using the internal rate of return to evaluate investment alternatives,what rate would an analyst need to specify?

Question

Quizplus · Accepted Answer

The analyst would need to specify the cutoff rate, also known as the hurdle rate, which represents the minimum rate of return required for the investment to be considered acceptable. The internal rate of return is compared to the cutoff rate to determine whether the investment is worthwhile.

When Using the Internal Rate of Return to Evaluate Investment