What do the two terms r and k represent in the IRR rule k c r Accept?
A) k = net present value; r = discounted cash flow
B) k = discounted cash flow; r = net present value
C) k = internal rate of return; r = opportunity cost of capital
D) k = opportunity cost of capital; r = internal rate of return

Question

Quizplus · Accepted Answer

In the IRR (Internal Rate of Return) rule, "r" represents the internal rate of return of a project, and "k" represents the opportunity cost of capital. The rule states that if the internal rate of return (r) is greater than the opportunity cost of capital (k), the project should be accepted.

What Do the Two Terms R and K Represent in the IRR