General Studies · Financial Management
A company is evaluating a project using Net Present Value (NPV). Its cost of capital is 10% per annum and the project's Internal Rate of Return (IRR) is calculated as 14%. Which of the following statements is true regarding this project?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The project is worthwhile because the IRR is a positive value
- 2The project is worthwhile because the IRR is greater than the cost of capital✓
- 3The project is not worthwhile because the IRR is less than the ROCE
- 4The project is not worthwhile because the payback is less than five years
Correct answer
The project is worthwhile because the IRR is greater than the cost of capital
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