If the internal rate of return exceeds the required rate of return for a project,then the net present value of that project is positive.

Question

Quizplus · Accepted Answer

This statement is correct. The internal rate of return (IRR) is the rate at which the net present value (NPV) of a project is equal to zero. If the IRR is higher than the required rate of return, then the NPV will be positive, indicating that the project will generate profits that exceed its cost of capital.

If the Internal Rate of Return Exceeds the Required Rate