Acceptance rule of irr, Finance Basics

Acceptance Rule of IRR

IRR will accept a venture if its IRR is higher than or equivalent to the minimum required rate of return such is usually the cost of finance also recognized as the cut off rate or hurdle rate, and in this case IRR will be the highest rate of interest a firm would be prepared to pay to finance a project by borrowed funds and without being financially worse off with paying back the loan or the principal and accrued interest so out of the cash flows generated with that project.  Hence, IRR is the break-even rate of borrowing from commercial banks.

Posted Date: 1/31/2013 1:05:34 AM | Location : United States







Related Discussions:- Acceptance rule of irr, Assignment Help, Ask Question on Acceptance rule of irr, Get Answer, Expert's Help, Acceptance rule of irr Discussions

Write discussion on Acceptance rule of irr
Your posts are moderated
Related Questions
Define the process of Opening an Account with Broker After a broker has been selected, the investor has to place an order on the broker. The broker will open an account in t

Dividend Cover Ratio Dividend cover = EPS/ DPS = Earning to ordinary shares/Dividend paid       This signifies the number of times dividend can be paid from earnin

Example of Net Present Value Method Cost of investment = 100,000/=, Interest rate = 10percent, Inflows year 1 = 80,000/= Year 2 = 50,000/= NPV   = 80,000 / 1.1 + 5

'The most significant function of any Central Bank is to undertake monetary control operations'.   Discuss with specific reference to the Bank of England, highlighting its current

Interest Rate Levels and Stock Prices Interest rates contain two effects on corporate profits: a) Since interest rate is a cost, and like the higher the rate of interest the

Requirements for Raising Loan Requirements for Raising Loan are as follow: a) Subsidiaries of the company and History. b) Qualifications, ages, and names of the company's dire

Price - Sales of Goods Like where section 10 provides such the price for goods may like fixed by like: (i) Contract; and one is (ii) The manner provided within the contr

Explain the Giving Margin Money to Broker Marin  is  the  amount  of  money  which is provided  by customer to the brokers who have agreed to trade their securities. It may

Joint Stock Companies - Types of Business Organisations Initiators contribute to the capital support of those companies via the purchase of shares of those companies. These co