When the NPV of an Investment Is Positive, Then the IRR

question 63

Multiple Choice

When the NPV of an investment is positive, then the IRR will be:

• A)equal to the opportunity cost of capital.
• B)greater than the opportunity cost of capital.
• C)less than the opportunity cost of capital.
• D)less than or equal to the opportunity cost of capital.

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Definitions:

Alternatives

Different options or strategies available for consideration in decision-making processes.

Original Cost

Original Cost refers to the initial monetary value spent to acquire an asset, including purchase price and any other associated costs necessary to get the asset ready for use.

Increased Revenues

The growth in money that a company brings in from its operations, indicating a rise in sales or other income sources.

Variable Costs

These are expenses that vary directly with changes in production volume or activity level.