If the internal rate of return exceeds the discount rate, the net present value is:
A) Negative
B) Zero
C) Less than one
D) Positive

Question

Quizplus · Accepted Answer

When the internal rate of return (IRR) exceeds the discount rate, it means the project is generating returns at a rate higher than the cost of capital. This results in a positive net present value (NPV), indicating that the project is expected to add value to the company.

If the Internal Rate of Return Exceeds the Discount Rate