If a project's net present value is negative,the internal rate of return is:

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is the discount rate at which the project's net present value (NPV) is zero. If NPV is negative (i.e., the project's cash outflows exceed its cash inflows), this means that the IRR is less than the discount rate. This is because a lower discount rate would result in a less negative NPV (or potentially positive NPV), and therefore the IRR must be lower than the discount rate to result in a negative NPV.

If a Project's Net Present Value Is Negative,the Internal Rate