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Financial Forensics · Quiz 2 · 2 Apr 2023 · January 2023 term · Set QPE2

Question 15: What is the relationship between the IRR and the cost of…

Question 15

+1 markOne correct option

What is the relationship between the IRR and the cost of capital?

  1. A

    The IRR must be lower than the cost of capital for the investment to beprofitable.

  2. B

    The IRR must be higher than the cost of capital for the investment to beprofitable.

  3. C

    The IRR and cost of capital are unrelated.

  4. D

    The IRR and cost of capital have an inverse relationship.

Show answer

Correct answer

  • B

    The IRR must be higher than the cost of capital for the investment to beprofitable.

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Question 15 of 25 in the IIT Madras BS Financial Forensics (Financial Forensics) Quiz 2 paper sat on 2 Apr 2023, in the January 2023 term (IIT M DEGREE AN3 EXAM QPE3 02 Apr 2023). It carries 1 mark.

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