Which of the Following Is Not a Limitation of the IRR

question 33

Multiple Choice

Which of the following is not a limitation of the IRR capital budgeting technique?

• A)It does not take into account the size of the project.
• B)It is difficult to calculate without using trial and error,a financial calculator or a spreadsheet.
• C)The rule must be modified if it is an investing project or a financing project.
• D)Multiple IRR values can arise if the project has both positive and negative future cash flows.
• E)All of the above are limitations of the IRR technique.

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Definitions:

Iron-Sulfur World

A theory regarding the origin of life on Earth, suggesting that life began at hydrothermal vents, where iron and sulfur compounds provided the energy and catalytic surfaces for the synthesis of organic molecules.

Hydrothermal Vents

Fissures in the deep ocean floor that release hot water and inorganic compounds.

Organic Molecules

Chemical compounds that contain carbon and are found in all living organisms, essential for life.

Organic Polymers

Large molecules composed of repeated subunits (monomers) that are typically carbon-based, like proteins, nucleic acids, and plastics.