The Reason Why the IRR Criterion Can Give Conflicting Signals

question 102

Multiple Choice

The reason why the IRR criterion can give conflicting signals with mutually exclusive projects is:

• A) the NPVs of these projects cross over at some discount rate.
• B) discounted cash flow is not considered with mutually exclusive projects.
• C) IRR performs better with accounting returns than with cash flows.
• D)mutually exclusive projects have multiple IRRs

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