Concord Hospital is considering an investment project with an estimated internal

Question

Concord Hospital is considering an investment project with an estimated internal rate of return (IRR) equal to 12 percent. Under what conditions should Concord Hospital accept the project? Choose the best answer A. The risk-adjusted opportunity cost of capital is 15 percent. O B. The project's payback period is greater than the required payback period C. The net present value of the project is zero O D. The risk-adjusted opportunity cost of capital is 10 percent O E. The IRR is positive Reset Selectio

Explanation / Answer

The correct answer is D.

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IRR is the rate at which if we discount the cash inflow the NPV will be zero.

Moreover the decision rule for IRR is that if WACC or required rate is less than the IRR project is accepted, else rejected.

Correct answer is D because, the IRR is more than the opportunity cost of capital

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Hope this answer your query.

Feel free to comment if you need further assistance. J

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