- CFA Exams
- CFA Level I Exam
- Study Session 10. Corporate Finance (1)
- Reading 32. Capital Budgeting
- Subject 3. Investment Decision Criteria
CFA Practice Question
The following statements regarding the NPV rule and the rate of return rule are true except: ______
A. accept a project if its NPV > 0 and reject a project if its NPV < 0.
B. accept a project if its rate of return > 0.
C. accept a project if its rate of return > opportunity cost of capital.
User Contributed Comments 3
| User | Comment |
|---|---|
| myanmar | accept a project if the irr is above your hurdle rate! |
| Andrewua | it seems that we should accept project if IRR>required rate of return. if just irr>0 it doesn't mean positive NPV... |
| bvides | Rate of return should be more then the REQUIRED one by the firm |