What will happen to the internal rate of return (IRR) of a project if the discount rate is decreased from 8% to 6%?

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is a metric used to evaluate the profitability of potential investments. It is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. The IRR is inherent to the cash flows of the project and does not change with the discount rate used in NPV calculations. Therefore, changing the discount rate from 8% to 6% does not affect the IRR of the project.

What Will Happen to the Internal Rate of Return (IRR)