If an investment project has a positive net present value, then the internal rate of return is

Question

Quizplus · Accepted Answer

If a project has a positive NPV, it means that the expected cash inflows are greater than the expected cash outflows, discounted at a rate equal to the cost of capital. The internal rate of return (IRR) is the discount rate at which the NPV of the project is zero. Therefore, if the NPV is positive, the IRR must be greater than the cost of capital, as the project is generating a return greater than the required rate of return.

If an Investment Project Has a Positive Net Present Value