A Company That Is Using the Internal Rate of Return

question 103

Multiple Choice

A company that is using the internal rate of return (IRR) to evaluate projects should accept a project if the IRR:

• A) is greater than the project's net present value.
• B) equates the present value of the project's cash inflows with the present value of the project's cash outflows.
• C) is greater than zero.
• D) is greater than the hurdle rate.
• E) is less than the firm's cost of investment capital.