If the internal rate of return exceeds the discount rate, then the net present value of a project is
A)positive.
B)negative.
C)zero.
D)one.

Question

Quizplus · Accepted Answer

If the internal rate of return (IRR) exceeds the discount rate, it means that the project is generating a return higher than the cost of capital used to finance it. As a result, the net present value (NPV) of the project will be positive, indicating that the project is expected to generate more cash flows than what is required to finance it. Therefore, the best choice is A) positive.

If the Internal Rate of Return Exceeds the Discount Rate