STATE the acceptance rule under Internal Rate of Return (IRR) method of capital budgeting.

CA Intermediate · Financial Management and Strategic Management · RTP · May 2026
STATE the acceptance rule under Internal Rate of Return (IRR) method of capital budgeting.

Suggested Answer and Working Notes:

Acceptance Rule of IRR method. The use of IRR, as a criterion to accept capital investment decision involves a comparison of IRR with the required rate of return known as cut-off rate. If IRR > Cut-off Rate or WACC Accept the Proposal If IRR < Cut-off Rate or WACC Reject the Proposal

Topics: Part-A: Financial Management

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