An Internal Rate of Return Greater Than the Cost of Capital

question 146

True/False

An internal rate of return greater than the cost of capital guarantees that the firm will earn at least its required return.

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Definitions:

Law of Equity

A body of law that provides remedies and relief in situations where strict legal rules would be unfairly rigid, focusing on fairness and justice.

Gratuitous Promise

A vow or commitment to do something for someone else without expecting anything in return.

Breach of Contract

The act of breaking any terms and conditions that were mutually agreed upon in a legally enforceable contract.

Consideration

An item of worth traded between entities within a contract, essential for the contract to be considered enforceable by law.