A stand-alone project should be undertaken only if:

Question

Quizplus · Accepted Answer

A stand-alone project should be undertaken if its IRR is greater than the cost of capital. This means that the project is expected to generate returns that exceed what investors could earn elsewhere with their money. In this case, the NPV of the project will be positive. On the other hand, if the cost of capital is greater than the project's IRR, the project should be rejected as it will not generate enough returns to meet the required rate of return. Similarly, if the cost of capital is equal to the project's IRR or the NPV of the project is zero, it is not the best choice since there is no positive net present value to justify the investment.

A Stand-Alone Project Should Be Undertaken Only If