Which of the Following Is Not an Advantage of IRR

question 51

Multiple Choice

Which of the following is not an advantage of IRR?

• A) It uses the concept of a rate of return, which is familiar to many managers.
• B) It incorporates the time value of money by not treating cash received in different years as equal.
• C) There is only one IRR for every investment.
• D) It uses cash flows and not profits, and the payment of cash outflows is more closely aligned with cash inflows than profits would be.

---

Definitions:

P(A And B)

The probability that events A and B both occur in a probabilistic experiment.

P(A Or B)

P(A Or B) represents the probability that either event A or event B occurs, including the case where both may occur.

Probability Tree

A diagram that shows the possible outcomes of a series of related choices or events, and their probabilities.

Marital Status

A legal or social recognition of a person's relationship status, often categorized as single, married, divorced, or widowed.