What should the IRR exceed for a capital project to be favourable?

Name: What should the IRR exceed for a capital project to be favourable?
Brand: Quizplus
Rating: 4.8 (50 reviews)

Question

Quizplus · Accepted Answer

The IRR (Internal Rate of Return) should exceed the weighted average cost of capital (WACC) for a capital project to be considered favourable. This is because the WACC represents the minimum return that a company must earn on an existing asset base to satisfy its creditors, owners, and other providers of capital, or they will invest elsewhere.

What Should the IRR Exceed for a Capital Project to Be