The internal rate of return for a project will increase if:
A)the initial cost of the project can be reduced.
B)the total amount of the cash inflows is reduced.
C)each cash inflow is moved such that it occurs one year later than originally projected.
D)the required rate of return is reduced.
E)the discount rate is increased.

Question

Quizplus · Accepted Answer

If the initial cost of the project can be reduced, the size of the cash outflow at the start of the project will be smaller. This will increase the project's net present value (NPV) and, therefore, its internal rate of return (IRR).

The Internal Rate of Return for a Project Will Increase