A significant disadvantage of the internal rate of return is that it

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The internal rate of return assumes that all cash flows are reinvested at the same rate, which may not be realistic in practice. This unrealistic reinvestment assumption can lead to inaccurate evaluations of investment opportunities, making it a significant disadvantage of the method. A and B are not significant disadvantages of the internal rate of return, as the method fully considers the time value of money and gives proper weight to all cash flows. D is not a disadvantage but rather a characteristic of the method.

A Significant Disadvantage of the Internal Rate of Return Is