A project is profitable if its internal rate of return:

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is a measure of a project's profitability. It is the discount rate at which the project's net present value (NPV) is equal to zero. Therefore, if the IRR exceeds the project's opportunity cost of capital (the expected return on a comparable investment), the project is considered profitable. Option D states that the project's IRR must exceed its opportunity cost of capital, making it the best choice.

A Project Is Profitable If Its Internal Rate of Return