An Investment Is Acceptable If Its IRR

question 20

Multiple Choice

An investment is acceptable if its IRR:

• A) is exactly equal to its net present value (NPV).
• B) is exactly equal to zero.
• C) is less than the required return.
• D) exceeds the required return.
• E) is exactly equal to 100%.

---

Definitions:

Royalty Contracts

Agreements where the owner of a certain property, patent, copyrighted work, or trademark allows another party to use it in exchange for an agreed upon payment(s) or royalties.

Compensation Contracts

Agreements specifying the terms of pay and benefits for an employee or executive, which may include salary, bonuses, stock options, and other forms of compensation.

Accounting Standards Codification

The collection and organization of the authoritative accounting and reporting standards for U.S. GAAP (Generally Accepted Accounting Principles).

GAAP

Generally Accepted Accounting Principles; a collection of commonly followed accounting rules and standards for financial reporting in the United States.