Without a computer and special calculator,________.
A)computing the payback period is much more difficult than computing the IRR
B)finding the IRR will typically be a very easy process
C)finding the IRR may be a very tedious process only if the NPV is negative
D)finding the IRR may be a very tedious process since it is an iterative process

Question

Quizplus · Accepted Answer

Finding the IRR involves an iterative process, which means multiple calculations must be made and the answer is refined with each iteration. Without a computer or special calculator, this process could become very tedious and time-consuming. Therefore, option D is the correct answer. Option A is incorrect because computing the payback period is a straightforward calculation that can be done without a computer or special calculator. Option B is incorrect because finding the IRR can be difficult even with a calculator, especially if the cash flows are complex. Option C is incorrect because the sign of the NPV has no impact on the difficulty of calculating the IRR.

Without a Computer and Special Calculator,________