If the Net Present Value of a project is $1,000 after using a discount rate of 8%, then one can conclude that the Internal Rate of Return is:

Question

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If the Net Present Value of the project is positive ($1,000), it means that the present value of the future cash flows is higher than the initial investment, using the chosen discount rate (8%). This indicates that the project is profitable and it generates a return higher than the cost of capital (8%). Therefore, the Internal Rate of Return must be higher than the discount rate (8%), and the best choice is A, which states that the IRR is greater than 8%.

If the Net Present Value of a Project Is $1,000