If a Project Has an Internal Rate of Return of 12

If a project has an internal rate of return of 12 per cent and a negative net present value,which of the following statements is true regarding the discount rate used for the net present value computation?

A) The discount rate must have been greater than 12 per cent.
B) The discount rate must have been less than 12 per cent.
C) The discount rate must have been equal to 12 per cent.
D) The discount rate must have been 0 per cent.

Correct Answer:

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