Economics · Financial Management
Which of the following statements about the internal rate of return (IRR) is true?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A project should be rejected if its IRR is positive.
- 2A project should be accepted if its IRR is lower than the company's cost of capital.
- 3The IRR is the discount rate at which the NPV equals zero.✓
- 4The IRR is the discount rate at which the NPV is maximized.
Correct answer
The IRR is the discount rate at which the NPV equals zero.
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