If a project has a negative net present value, the internal rate of return will be
A) less than the discount rate.
B) greater than the discount rate.
C) equal to the discount rate.
D) a negative rate of return.

Question

Quizplus · Accepted Answer

If a project has a negative net present value, it means that the discounted cash inflows of the project are less than the discounted cash outflows. In such a scenario, the internal rate of return (IRR) will be less than the discount rate. This is because the IRR is the rate at which the project's net present value is equal to zero. If the net present value is negative, the IRR will be lower than the discount rate.

If a Project Has a Negative Net Present Value, the Internal