alleryStart learning →A normal project has IRR above the cost of capital. Its NPV is what?
APositive
BExactly zero
CUndefined
DNegative
Answer & Solution
Correct answer: A. Positive
For conventional cash flows a higher IRR than the discount rate means a positive NPV.
Keep practising Capital Budgeting Basics
Browse all Capital Budgeting Basics questions for CA Inter, or explore more Financial Management topics.
Related questions
At 20%, Rs 60,000 received in one year has a present value of?Outlay Rs 90,000 recovers Rs 30,000 each year. The payback period is?Two projects have NPVs of Rs 12,000 and minus Rs 4,000. Combined NPV?The discount factor at 10% for year 3 is about what?Rs 1,00,000 spent yields Rs 60,000 then Rs 72,000. What is the IRR?Rs 1,00,000 spent yields Rs 40,000 a year for 3 years. NPV at 10%?Spending Rs 2,00,000 brings Rs 1,20,000 in each of 2 years. NPV at 10%?A machine costing Rs 90,000 returns Rs 1,10,000 after a year. NPV at 10%?