Using internal rate of return, a conventional project should be accepted if the internal rate of return is:
A)equal to the discount rate.
B)greater than the discount rate.
C)less than the discount rate.
D)negative.
E)equal to zero.

Question

Quizplus · Accepted Answer

A project is financially viable if the internal rate of return (IRR) is greater than the discount rate. IRR is the rate at which the net present value (NPV) of the project becomes zero. If the IRR is greater than the discount rate, it means that the project is generating returns at a rate higher than the cost of capital, and hence the project is acceptable.

Using Internal Rate of Return, a Conventional Project Should Be