The Rule for Project Acceptance Under the Internal Rate of Return

question 65

Multiple Choice

The rule for project acceptance under the internal rate of return method is that:

• A) IRR should be greater than zero.
• B) IRR should be less than zero.
• C) IRR should be greater than the hurdle rate.
• D) IRR should be less than the hurdle rate.
• E) IRR should equal the hurdle rate.

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Definitions:

Outside Supplier

An external entity that provides goods or services to another company.

Indifferent

A state or condition where a decision-maker has no preference between two or more alternatives.

Subcomponent

A subcomponent is a constituent part that plays a role within a larger component or system, often essential for its functionality.

Financial Advantage

A benefit in terms of money that can be gained from a particular action or investment.