A project with an IRR of 15% and a cost of capital of 10% will always have a positive NPV.
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A project with a profitability index of 0.95 has a positive…
A project with a profitability index of 0.95 has a positive NPV.
The Internal Rate of Return (IRR) rule recommends accepting…
The Internal Rate of Return (IRR) rule recommends accepting a project when IRR is less than the cost of capital.
If all future cash flows are positive and the initial invest…
If all future cash flows are positive and the initial investment is negative, there is only one IRR.
The project with the highest profitability index should alwa…
The project with the highest profitability index should always be selected, regardless of other constraints.
When choosing between mutually exclusive projects, the proje…
When choosing between mutually exclusive projects, the project with the highest NPV should be selected.
The IRR rule is appropriate for comparing mutually exclusive…
The IRR rule is appropriate for comparing mutually exclusive projects that differ significantly in size or investment amount.
An NPV can be negative even when the IRR is greater than the…
An NPV can be negative even when the IRR is greater than the cost of capital.
A project with positive cash flows and requiring no initial …
A project with positive cash flows and requiring no initial investment will have a positive NPV.
The NPV rule should be followed when it conflicts with other…
The NPV rule should be followed when it conflicts with other investment decision rules.