Consider a project lasting one year which costs X in year zero and generates a cash flow of Y in year one. The project has an internal rate of return of 10%. This means that

1. If the appropriate market interest rate is less than 10%, then the project has a negative NPV
2. The NPV of the project is X-Y/1.1
3. If the appropriate market interest rate is greater than 10%, then the project has a positive NPV
4. If the appropriate market interest rate is greater than 10%, then the project has a negative NPV