Which of the following statements is most correct?
A) If a project's internal rate of return (IRR) exceeds the cost of capital, then the project's net present value (NPV) must be positive.
B) If Project A has a higher IRR than Project B, then Project A must also have a higher NPV.
C) The IRR calculation implicitly assumes that all cash flows are reinvested at a rate of return equal to the cost of capital.
D) Answers a and c are correct.
E) None of the answers above is correct.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is most correct?
A) If a project's internal rate of return (IRR) exceeds the cost of capital, then the project's net present value (NPV) must be positive.
B) If Project A has a higher IRR than Project B, then Project A must also have a higher NPV.
C) The IRR calculation implicitly assumes that all cash flows are reinvested at a rate of return equal to the cost of capital.
D) Answers a and c are correct.
E) None of the answers above is correct.

Which of the Following Statements Is Most Correct