In capital budgeting,a project is accepted only if the internal rate of return equals or:

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is the discount rate at which the net present value (NPV) of a project equals zero. Therefore, if the IRR exceeds the required rate of return, the project is considered acceptable because it generates a return greater than the minimum required by investors. Alternatively, if the IRR is less than the required rate of return, the project would generate a return lower than the cost of capital and would not be accepted. Therefore, choice D is the best answer. The other answer choices are not related to the IRR decision rule.

In Capital Budgeting,a Project Is Accepted Only If the Internal