What is the expected outcome if the IRR equals the investor's hurdle rate?

When the Internal Rate of Return (IRR) equals the investor's hurdle rate, it indicates that the project is expected to generate a return that is precisely equal to the minimum rate of return that the investor requires to justify the investment. The hurdle rate often incorporates the cost of capital, risk factors, and the opportunity cost of investing in other projects.

In this scenario, since the IRR meets the investor's expectations, it suggests that the project has the potential to generate sufficient returns to cover its costs and provide the desired compensation for the risk undertaken. Proceeding with this investment would be sensible as it aligns with the investor's financial goals. This means the investment can be considered at least acceptable, as it is not expected to lose value.

The other considerations, although relevant in different contexts, do not apply here since the IRR being equal to the hurdle rate simply shows that the project meets the required return criteria. Thus, moving forward with the investment makes logical financial sense.