A project is profitable when its internal rate of return is ______ the interest rate.
A) greater than
B) less than
C) equal to
D) less variable

Question

Quizplus · Accepted Answer

A project is considered profitable when the internal rate of return (IRR) is greater than the interest rate. The IRR is the rate at which the net present value (NPV) of a project is equal to zero. If the IRR is greater than the interest rate, then the project is generating a return that is greater than the cost of capital, making it profitable.

A Project Is Profitable When Its Internal Rate of Return