19. When using IRR to evaluate a single project which of the following statements is true?...

19. When using IRR to evaluate a single project which of the following statements is true?

Group of answer choices

a. IRR fails to consider the time value of money.

b. IRR fails to consider cash flows beyond the cut-off point.

c. IRR may reject the project when NPV says accept.

d. There may be multiple IRRs for non-conventional cash flows.

Solutions

Expert Solution

a. IRR considers the time value of money. - Incorrect

b. IRR considers cash flows beyond the cut-off point. - Incorrect

c. IRR and NPV says same decision in the case of a single Project - Incorrect

d. There may be multiple IRRs for non-conventional cash flows. Change in Sign of Cash flows results multiple IRRs- Correct

Answer D

jeff jeffy answered 2 years ago

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