The internal rate of return rule can result in the wrong decision if the projects being compared have:
A)differences in scale.
B)differences in timing.
C)differences in NPV.
D)A and B are correct.

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) rule assumes that the projects being compared have the same scale and timing. If the projects differ in these aspects, the IRR rule can result in the wrong decision. Therefore, options A and B are correct. Option C alone does not affect the IRR rule.

The Internal Rate of Return Rule Can Result in the Wrong