Which of the following capital expenditure planning and control techniques has been criticized because it might mistakenly imply that earnings are reinvested at the rate of return earned by the investment?

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) method has been criticized for implying that the reinvestment of earnings is at the IRR itself, which may not always be realistic or achievable. This assumption can lead to misleading results, especially for projects with high IRRs where such reinvestment rates are unlikely to be sustainable.

Which of the Following Capital Expenditure Planning and Control Techniques