The general rule when using the Internal Rate of Return to decide whether to invest in capital assets is to invest if the IRR ___________ the required rate of return.

Question

Quizplus · Accepted Answer

The general rule with IRR is that if it exceeds the required rate of return, the investment should be made. This is because the IRR represents the rate at which the project will break even and generate returns. If this rate is higher than the required rate of return, it means that the investment will generate more returns than what is demanded by investors. Therefore, the answer is C.

The General Rule When Using the Internal Rate of Return