The Internal Rate of Return Is Unreliable as an Indicator

question 8

Multiple Choice

The internal rate of return is unreliable as an indicator of whether or not an investment should be accepted given which one of the following?

• A)One of the time periods within the investment period has a cash flow equal to zero.
• B)The initial cash flow is negative.
• C)The investment has cash inflows that occur after the required payback period.
• D)The investment is mutually exclusive with another investment under consideration.
• E)The cash flows are conventional.