The IRR Rule States That Firms Should Accept Any Project

question 69

True/False

The IRR rule states that firms should accept any project offering an internal rate of return in excess of the cost of capital.

Distinguish between renewable and nonrenewable resources.

Recognize how factors of production contribute to differences in economic growth between countries.

Understand the concept of returns to scale in production.

Comprehend the impact of savings and investment rates on economic growth.

---

Definitions:

Gain Or Loss

The financial result when the selling price of an asset differs from its cost, resulting in either profit (gain) or deficit (loss).

Original Cost

The initial purchase price or investment made to acquire an asset, not accounting for depreciation or amortization.

Asset Improvements

Expenditures made to increase the usefulness or value of a fixed asset.

Ordinary Maintenance

Routine and regular upkeep activities required to maintain or preserve assets in their original condition, preventing deterioration over time.