The IRR method assumes that cash inflows associated with a particular investment occur:

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The IRR method assumes that cash inflows associated with a particular investment occur only at the end of the year. This means that all the cash flows generated by the investment, such as revenues or other income, are assumed to occur at the end of each year before expenses and taxes are paid. This assumption simplifies the calculation of the IRR, which is the discount rate that makes the net present value of the investment's cash flows equal to zero.

The IRR Method Assumes That Cash Inflows Associated with a Particular