The internal rate of return is:
A)more reliable as a decision making tool than net present value whenever you are considering mutually exclusive projects.
B)equivalent to the discount rate that makes the net present value equal to one.
C)a better methodology than net present value when dealing with unconventional cash flows.
D)dependent upon the interest rates offered in the marketplace.
E)cumbersome to compute without the use of either a financial calculator or a computer.

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is cumbersome to compute without a financial calculator or computer because it involves solving for the rate that makes the net present value of cash flows equal to zero, which typically requires iterative calculations.

The Internal Rate of Return Is