Two firms examined the same capital budgeting project which had an IRR of 16%. One firm accepted the project but the other rejected it. One of the firms must have made an incorrect decision. Discuss the validity of this statement.

the statement is not valid. A company can reject the 16% IRR project if it is less than its discount rate. the discount rate is the minimum acceptable rate at which a project can be accepted. so, if 16% is less than than the discount rate, the project would be rejected.

on the other hand, if the discount rate is less than 16%, the project should be accepted because the return of the project would be greater than the discount rate.

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

the specific actions take by the fed. what the fed was attempting to do by taking these actions. the result of the actions taken by the fed

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