As a rule, independent projects are accepted if the internal rate of return is greater than or equal to:
A) 1.0
B) zero
C) marginal cost of capital
D) expected rate of return

Question

Quizplus · Accepted Answer

Independent projects will only be accepted if their return is greater than the cost of capital. The marginal cost of capital is the cost of acquiring additional funds for new investment opportunities. If a project's return is less than the cost of capital, then accepting the project would actually decrease the value of the firm. Therefore, choice C is the correct answer.

As a Rule, Independent Projects Are Accepted If the Internal