The decision rule for the internal rate of return method of investment decision making is that projects will be accepted for rates that are:

Question

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The internal rate of return method accepts projects for rates that are above the entity's required rate of return. This indicates that the project will generate returns that exceed the cost of capital that the company uses to fund its operations. Accepting projects with rates below the required rate of return would result in the company losing money, while accepting projects above the required rate of return would increase the company's profitability.

The Decision Rule for the Internal Rate of Return Method