Question

A project should be rejected if IRR is _____ and accepted if IRR is _____. Greater...

A project should be rejected if IRR is _____ and accepted if IRR is _____.

Greater than WACC; less than WACC

Greater than MIRR; less than MIRR

Less than WACC; greater than WACC

Less than MIRR; greater than MIRR

Less than 0; Greater than 0

Greater than 0; Less than 0
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Answer #1

Project should be rejected when internal rate of return is lower than the weighted average cost of capital because weighted average cost of capital is taken as a hurdle rate and when the internal rate of return is greater than the weighted average cost of capital, then the project should be accepted.

Internal rate of return is not to be calculated MIRR and other options regarding internal rate of return false.

Correct answer will be option (C) less than WACC, Greater than WACC.

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