The following are some of the shortcomings of the IRR method except
A)IRR is conceptually easy to communicate.
B)projects can have multiple IRRs.
C)IRR cannot distinguish between a borrowing project and a lending project.
D)it is very cumbersome to evaluate mutually exclusive projects using the IRR method.

Question

Quizplus · Accepted Answer

The statement says that IRR is easy to communicate conceptually, so it is not a shortcoming. B is a shortcoming as a project can have multiple IRRs which will make it difficult to interpret the result. C is a shortcoming as the IRR method does not distinguish between the borrowing and lending project, which leads to confusion. D is a shortcoming as it is difficult to evaluate mutually exclusive projects with the IRR method.

The Following Are Some of the Shortcomings of the IRR