Which of the following is false with respect to internal rate of return?
A.
The internal rate of return (IRR) is a capital budgeting method used by firms to decide whether they should make long-term investments.
B.
The IRR is the annualized effective compounded return rate which can be earned on the invested capital, i.e. the yield on the investment.
C.
IRR is defined as any discount rate that results in a positive net present value (present value of cash flows- initial investment) of zero of a series of cash flows.
D.
In general, if the IRR is greater than the project’s cost of capital or hurdle rate, the project will not be accepted at any cost.
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