The acceptance of an investment project implies that: 1.Its IRR is greater than 15 percent
2)Its NPV is greater than its IRR
3)Its NPV is greater than 0
A)1
B)2
C)3
D)Both 2 and 3

Question

Quizplus · Accepted Answer

The acceptance of an investment project requires that its NPV is greater than 0, indicating that the project is profitable and creates value. The IRR and NPV are both important metrics for evaluating the potential of an investment project, but the IRR threshold of 15 percent is not necessarily a universal requirement, and a project with an IRR greater than 15 percent may still not be profitable if its NPV is negative. Therefore, option 2 is not a definitive criterion for accepting an investment project, and option 3 is the best choice.

The Acceptance of an Investment Project Implies That: 1