A Company That Is Using the Internal Rate of Return

question 103

Multiple Choice

A company that is using the internal rate of return (IRR) to evaluate projects should accept a project if the IRR:

• A) is greater than the project's net present value.
• B) equates the present value of the project's cash inflows with the present value of the project's cash outflows.
• C) is greater than zero.
• D) is greater than the hurdle rate.
• E) is less than the firm's cost of investment capital.

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Definitions:

Confederacy

The group of eleven southern states that seceded from the United States from 1860-1861, forming the Confederate States of America and initiating the Civil War.

Native Americans

Native Americans are the indigenous peoples of the United States, including both the tribes that have been living in North America for thousands of years and their diverse cultures and societies.

Cherokee Slaveholders

Members of the Cherokee Nation who owned African American slaves, particularly before the Civil War.