Which of the following statement(s)is(are)true for the application of the IRR in a capital budgeting decision?

Question

Quizplus · Accepted Answer

Choice A is true because the IRR represents the rate of return that would make the project's NPV equal to zero, meaning that if the IRR is less than the cost of capital, the project would not be profitable.

Choice B is false because the project's IRR is independent of the cost of capital.

Choice C is true because both IRR and bond yield generate a zero NPV.

Therefore, the correct answer is D.

Which of the Following Statement(s)is(are)true for the Application of the IRR