If the internal rate of return from an investment is more than the opportunity cost of funds the firm should:
A) make the investment.
B) not make the investment.
C) only make the investment using retained earnings.
D) only make part of the investment and wait to see if interest rates decrease.

Question

Quizplus · Accepted Answer

If the internal rate of return from an investment is higher than the opportunity cost of funds, it means that the investment will generate more return than the cost of borrowing or using company funds. Thus, the firm should make the investment to maximize its returns.

If the Internal Rate of Return from an Investment Is