Which of the following is a disadvantage of the internal rate of return (IRR) rule? Multiple choice question. It always leads to a decision that conflicts with the decision of the NPV method. It results in multiple answers for conventional cash flows. It may lead to incorrect decisions when comparing mutually exclusive investments. It needs more input data than the NPV method.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 2QTD
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Which of the following is a disadvantage of the internal rate of return (IRR) rule?

Multiple choice question.

It always leads to a decision that conflicts with the decision of the NPV method.

It results in multiple answers for conventional cash flows.

It may lead to incorrect decisions when comparing mutually exclusive investments.

It needs more input data than the NPV method.

 

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