The Following Are Some of the Shortcomings of the IRR

question 30

Multiple Choice

The following are some of the shortcomings of the IRR method except:

• A)IRR is conceptually easy to communicate.
• B)Projects can have multiple IRRs.
• C)IRR cannot distinguish between a borrowing project and a lending project.
• D)It is very cumbersome to evaluate mutually exclusive projects using the IRR method.

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Definitions:

Production Decisions

The determination of what, how, and for whom goods and services will be produced by a firm.

Output

The total amount of goods or services produced by a company, sector, or economy.

Normative Questions

Questions that address what should be, focusing on value judgments and opinions rather than empirical facts.

Value Judgments

Assessments or opinions based on individual beliefs about what is important or desirable, often influencing decisions and policies.