alleryStart learning →When is a project profitable on the IRR criterion?
AIRR is below the cost of capital
BIRR equals zero exactly
CIRR exceeds the cost of capital
DIRR equals the payback period
Answer & Solution
Correct answer: C. IRR exceeds the cost of capital
A project earning more than the cost of the capital invested in it adds value, so it is accepted.
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Related questions
The same return received later gives an IRR that is:If cash flows are random variables, as in a life annuity, IRR uses their:The AIRR approach of Magni was introduced to solve problems of:In personal finance the IRR measures what type of performance?With no capital constraint, which projects does a firm accept to maximize value?Mutually exclusive projects are those from which:The equivalent annuity method divides the NPV by what to annualize it?The equivalent annuity method is often used to compare projects of: