If an investment project's IRR is higher than the company's hurdle rate, the company should go forward with the investment.

Question

Quizplus · Accepted Answer

If the IRR (Internal Rate of Return) of an investment project is higher than the company's hurdle rate (minimum required rate of return), it indicates that the project is generating enough returns to compensate for the risk taken by the company. Therefore, the company should go forward with the investment as it will increase the value of the company and benefit its shareholders.

If an Investment Project's IRR Is Higher Than the Company's