We know that IRR is the discounted rate that forces the PV of the expected future cash flow to equal the initial cash flow. So, in essence IRR forces PV to equal zero. This is helpful because the IRR is an estimate of the project's rate of return.

What happens if the IRR exceeds the cost of the funds used to finance the project?

What happens if the IRR is less than the cost of capital?

Answer rating: 100% (QA)

If the IRR exceeds the cost of the funds used to finance the project it indicates that the projects ... View the full answer