If the internal rate of return on a project is ________ the required rate of return,then the project should be accepted.
A) higher than
B) lower than
C) the same as
D) none of the above

Question

Quizplus · Accepted Answer

If the internal rate of return is higher than the required rate of return, it means that the project is generating a return that is greater than the cost of capital. Therefore, the project is a good investment and should be accepted. If the IRR is lower than the required rate of return, it means that the project is not generating enough return to justify the investment and should be rejected. If the IRR is the same as the required rate of return, it means that the project is generating exactly the return required to compensate for the cost of capital, and the decision to accept or reject the project depends on other factors such as the risk involved and the availability of alternative investments with higher returns.

If the Internal Rate of Return on a Project Is