An investment is acceptable if its IRR:
A) is exactly equal to its net present value (NPV).
B) is exactly equal to zero.
C) is less than the required return.
D) exceeds the required return.
E) is exactly equal to 100%.

Question

Quizplus · Accepted Answer

The Internal Rate of Return (IRR) is the discount rate at which the net present value (NPV) of an investment equals zero. An investment is acceptable if its IRR is greater than the required return, as this means the investment is generating a return that exceeds the cost of capital.

An Investment Is Acceptable If Its IRR