TRUE, When the internal rate of return is lesser than the needed return, the net present value is positive.
Net present value accounts for the time value of plutocrat and can be used to compare the rates of return of different systems, or to compare a projected rate of return with the chain rate needed to authorize an investment.
The time value of plutocrat is represented in the NPV formula by the reduction rate, which might be a chain rate for a design grounded on a company’s cost of capital. No matter how the reduction rate is determined, a negative NPV shows that the anticipated rate of return will fall suddenly of it, meaning that the design won't produce value.
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