Question

An investment is acceptable if its irr:

a. is exactly equal to its net present value (npv).
b. is exactly equal to zero.
c. is less than the required return.
d. exceeds the required return.
e. is exactly equal to 100%.

Answer 1

An acceptable investment is at minimum that a. is exactly equal to its net present value. However, any investor would not want to see this as he expects his investment would soar higher than the npv and gain through the years. Nonetheless, instead of losing, the minimum requirement is still equal to npv.