A serious problem with both the internal rate of return and net present value methods is that it is difficult to forecast cash flow accurately over a number of years.

Question

Quizplus · Accepted Answer

Both the IRR and NPV methods rely heavily on accurate cash flow projections, and it can be challenging to predict future cash flows with certainty, leading to potential inaccuracies in the calculated values.

A Serious Problem with Both the Internal Rate of Return