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.

---

Definitions:

Comparative Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower opportunity cost than its competitors, underlining the benefits of specialized production and trade.

Opportunity Cost

The relinquishment of possible rewards from other opportunities when one is selected.

Opportunity Cost

Refers to the benefits one foregoes by choosing one option over another, highlighting the trade-offs inherent in decision-making processes.

Bushel

A unit of volume that is used in the United States for measures of agricultural produce, such as grains, fruits, and vegetables.