329. CSO: 2D2b LOS: 2D2d Which of the following is not a shortcoming of the Internal Rate of Return (IRR) method? a. IRR assumes that funds generated from a project will be reinvested at an interest rate equal to the project’s IRR. b. IRR does not take into account the difference in the scale of investment alternatives. c. IRR is easier to visualize and interpret than net present value (NPV). d. Sign changes in the cash flow stream can generate more than one IRR.

2D2D WHICH OF THE FOLLOWING IS NOT A SHORTCOMING OF THE INTERNAL RATE...

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329.

CSO: 2D2b

LOS: 2D2d

Which of the following is not a shortcoming of the Internal Rate of Return (IRR)

method?

IRR assumes that funds generated from a project will be reinvested at an interest

rate equal to the project’s IRR.

IRR does not take into account the difference in the scale of investment

alternatives.

IRR is easier to visualize and interpret than net present value (NPV).

Sign changes in the cash flow stream can generate more than one IRR.