If a project's _____ exceeds the firm's weighted average cost of capital (WACC), its net present value (NPV) will be positive.

Question

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The internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. If the IRR exceeds the firm's weighted average cost of capital (WACC), it means the project is expected to generate a return higher than the cost of the capital used to finance it, resulting in a positive NPV.

If a Project's _____ Exceeds the Firm's Weighted Average Cost