WACC vs IRR

This problem practices the core distinction between a project’s internal return and its hurdle rate, which is a fundamental concept in valuation and capital budgeting. Candidates need to understand what IRR represents, how it is derived from a project’s cash flows, and what WACC represents as the blended cost of debt and equity used as the required return benchmark. Interviewers ask this because they want to see whether you can evaluate an investment using the right standard and explain why a project is attractive only when its expected return clears the financing cost.