If the internal rate of return project evaluation method is utilized an individual project would be accepted if it had:
A) an IRR greater than the discount rate.
B) a positive IRR.
C) an IRR that was less than the discount rate.
D) an IRR equal to zero.
E) a negative IRR.

Question

Quizplus · Accepted Answer

In order to utilize the internal rate of return (IRR) project evaluation method, the IRR must be compared to the discount rate. An individual project would be accepted if its IRR is greater than the discount rate. This means that the project is expected to generate a rate of return that is higher than the cost of funding the project. A positive IRR may not necessarily meet this criterion, as it could be lower than the discount rate. An IRR that is less than the discount rate indicates that the project is expected to generate a rate of return that is lower than the cost of funding the project. An IRR of zero would indicate that the project is expected to generate a rate of return that is equal to the cost of funding the project, which may or may not be acceptable depending on the specific circumstances of the project. A negative IRR would indicate that the project is expected to generate a rate of return that is lower than the cost of funding the project, making it an unattractive investment.

If the Internal Rate of Return Project Evaluation Method Is