Internal rate of return analysis suggests that a project should be undertaken if
A)IRR discount rate.
B)NPV 0.
C)discount rate inflation rate.
D)MB 0.

Question

Internal rate of return analysis suggests that a project should be undertaken if
A)IRR > discount rate.
B)NPV > 0.
C)discount rate > inflation rate.
D)MB > 0.

Quizplus · Accepted Answer

The internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of a project zero. A project is considered acceptable if its IRR is greater than the discount rate, as it indicates that the project is expected to generate a return greater than the cost of capital.

Internal Rate of Return Analysis Suggests That a Project Should