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QUESTION

Which of the following statements relating to the internal rate of return (IRR) is correct?

Which of the following statements relating to the internal rate of return (IRR) is correct?

1) If the IRR exceeds the required rate of return, the payback period is below the cutoff point.

2) When the IRR is less than the required return, the NPV is positive.

3) If two projects are mutually exclusive, you should select the project with the highest IRR

4) A project may have multiple IRRs if the project's cash flows are unconventional.

I believe the answer is 3

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