Select the Incorrect Statement Concerning the Internal Rate of Return

Multiple Choice

Select the incorrect statement concerning the internal rate of return (IRR) method of evaluating capital projects.

A) The higher the IRR the better.
B) The internal rate of return is that rate that makes the present value of the initial outlay equal to zero.
C) If a project has a positive net present value then its IRR will exceed the hurdle rate.
D) A project whose IRR is less than the cost of capital should be rejected.