alleryStart learning →A project has an IRR of 14% and the cost of capital is 12%. Decision?
AReject the project
BAccept the project
CTreat it as marginal
DAsk for a higher IRR
Answer & Solution
Correct answer: B. Accept the project
IRR above the cost of capital means a conventional project has positive NPV and should be 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: