The Internal Rate of Return (IRR)Model suffers from three problems.Which of the below is NOT one of these problems?
A)Comparing mutually exclusive projects
B)Cumbersome computations not resolvable by the latest technology
C)Incorporates the IRR as the reinvestment rate for the future cash flows
D)Multiple IRRs

Question

Quizplus · Accepted Answer

While the IRR model can be time-consuming to calculate without technology, the latest tools and software make the computations more manageable. The problems with the IRR model include: difficulty in comparing mutually exclusive projects, the assumption that the IRR is the reinvestment rate for future cash flows, and the possibility of multiple IRRs.

The Internal Rate of Return (IRR)Model Suffers from Three Problems