The IRR method gives a ________ to assess the viability of a project.

Question

Quizplus · Accepted Answer

The Internal Rate of Return (IRR) is a percentage measure of the profitability of a project or investment. It represents the rate of return that makes the net present value (NPV) of a project equal to zero. Therefore, the IRR can be used to assess the viability of a project by comparing it to the required rate of return, or the cost of capital. Projects with an IRR that exceeds the required rate of return are considered viable or profitable, while projects with an IRR that falls below the required rate of return are not considered viable. Thus, the IRR method gives a percentage return to assess the viability of a project.

The IRR Method Gives a ________ to Assess the Viability