When Using Internal Rate of Return to Evaluate Investment Projects

question 147

True/False

When using internal rate of return to evaluate investment projects, if the internal rate of return is greater than the required rate of return, the project should be accepted.

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Definitions:

External Cost

A cost borne by individuals or society that is not reflected in the market price of a good or service, often associated with negative externalities.

Socially Optimal

A condition or point at which the welfare of a society reaches its highest possible level, considering all factors and resources.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded.

Supply Curve

A graphical representation showing the relationship between the price of a good or service and the quantity of that good that suppliers are willing and able to provide.