If a Project's Internal Rate of Return Is Greater Than

question 115

True/False

If a project's internal rate of return is greater than or equal to an organization's hurdle rate,the project is considered to be an acceptable investment.

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Definitions:

Profit Margin

Profit margin is a financial metric showing the percentage of revenue that remains as profit after all operating expenses are deducted from sales.

Investment Turnover

A ratio that measures the efficiency of a company’s use of its assets in generating sales or revenue; the ratio of net sales to average total assets.

Transfer Prices

Prices charged for the selling of goods and services between subsidiaries or divisions within the same company.

Variable Cost

Expenses that change in proportion to the level of production or business activity.