The internal rate of return for a project will increase if:
A) The initial cost of the project can be reduced.
B) The total amount of the cash inﬂows is reduced.
C) Each cash inﬂow is moved such that it occurs one year later than originally projected.
D) The required rate of return is reduced.
E) The salvage value of the project is omitted from the analysis.

Question

Quizplus · Accepted Answer

If the initial cost of the project is reduced, the cash outflow decreases, which in turn increases the internal rate of return.

The Internal Rate of Return for a Project Will Increase