The internal Rate of Return (IRR) criterion for project acceptance, under theoretically infinite funds is: accept all projects which have
A)IRR equal to the cost of capital
B)IRR greater than the cost of capital
C)IRR less than the cost of capital
D)None of the above

Question

Quizplus · Accepted Answer

The IRR criterion for project acceptance states that a project should be accepted if its IRR is greater than the cost of capital. This implies that the project is expected to generate a return higher than the cost of financing it, thereby adding value to the firm.

The Internal Rate of Return (IRR) Criterion for Project Acceptance