If the Discount Rate Is Decreased from 9% to 7

question 67

Multiple Choice

If the discount rate is decreased from 9% to 7%, what will happen to the internal rate of return (IRR) of a project?

• A) IRR will always increase.
• B) IRR will always decrease.
• C) The discount rate change will not affect IRR.
• D) We cannot determine the direction of the effect on IRR from the information provided.

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