alleryStart learning →For a borrower, which IRR on a loan is preferable?
AAn IRR of exactly zero
BA lower IRR on the loan
CA higher IRR on the loan
DA negative IRR only
Answer & Solution
Correct answer: B. A lower IRR on the loan
On a loan the IRR is the rate the borrower pays, so a lower IRR is better.
Keep practising Capital Budgeting
Browse all Capital Budgeting questions for CA Inter, or explore more Financial Management topics.
Related questions
Under which cash flow statement section is capex commonly reported?Which spending is capital expenditure as it extends asset life?Which of these spending items is a capital expenditure?Where do capitalised expenditures show up in the financial statements?Which expense is the counterpart of capital expenditure?What is capital expenditure (capex)?Payback also ignores which part of a project's cash flows?Which key weakness does the simple payback period have?