When the net present value is negative, the internal rate of return is __________ the cost of capital.
A) greater than
B) greater than or equal to
C) less than
D) equal to

Question

Quizplus · Accepted Answer

When the net present value is negative, the investment is not generating enough return to cover the costs of the project. Therefore, the internal rate of return is less than the cost of capital.

When the Net Present Value Is Negative, the Internal Rate