Question

A company that is using the internal rate of return (IRR) to evaluate projects should accept a project if the IRR: is less than the firm's cost of investment capital. is greater than the project's net present value. is greater than the hurdle rate. is greater than zero. equates the present value of the project's cash inflows with the present value of the project's cash outflows.

Answer 1

is greater than the hurdle rate.

Step-by-step explanation:

other options are wrong because:

equates the present value of the project's cash inflows with the present value of the project's cash outflows ⇒ this is the definition of IRR

is greater than zero ⇒ if the project yields any profit, its IRR should be higher than 0

is less than the firm's cost of investment capital ⇒ the firm's NPV would be negative

is greater than the project's net present value ⇒ this simply doesn't make sense