Capilal budgetine Decision Criteriat tR. A prefects insemal rate of reture (IRR) is the: on a bend, The equation for calculating the IhR is: for the partealer dicourt rate that causes NFV to equel The 1Re calculaboc astumes that canh flows are reinvested at the the projects cost of capsal, then the project should be If exe ing is than the projects cest of captal, then the project sheuld be acceoted; however, if the trat is inss ttan projects are evaluated the 128 baproach can lead to defferences (earler cash fows in ene project va. later cosh flews in the other project) to the form averade indect Bellinuers whCC is 12s. If the progects were independent, which project(s) weuld be accepted accorsing to the 19e method? would be accepted would be actepted. Reinvestment at the is the supenor assumption, so when mutualy exdvive projects we eraluated the approoch should be ased for the capital budpeting decison