Which of the Following Is a Weakness of the Internal

question 104

Multiple Choice

Which of the following is a weakness of the internal rate of return method for screening investment projects?

• A) It does NOT consider the time value of money.
• B) It implicitly assumes that the company is able to reinvest cash flows from the project at the company's discount rate.
• C) It implicitly assumes that the company is able to reinvest cash flows from the project at the internal rate of return.
• D) It does NOT take into account all of the cash flows from a project.

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