A firm that uses a discount rate of 10 percent calculated the internal rate of return of a project to be 11% so

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is the discount rate at which the net present value (NPV) of all the cash flows (both positive and negative) from a project or investment equals zero. If the IRR is higher than the firm's discount rate (11% > 10%), it means the project is expected to generate a return higher than the firm's required rate of return, leading to a positive NPV.

A Firm That Uses a Discount Rate of 10 Percent