Which of the Following Is a Major Limitation of Using

question 54

Multiple Choice

Which of the following is a major limitation of using the internal rate of return as a tool in capital budgeting?

• A) Ignores the time value of money
• B) Does not consider cash flows
• C) Does not use accounting numbers
• D) Assumes unrealistic reinvestment rate

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Definitions:

Strategic Vision

A clear and inspiring long-term plan that outlines what an organization wants to achieve in the future and guides its decision-making processes.

Superordinate Goal

A shared goal that requires the cooperation of two or more groups or individuals, fostering collaboration and reducing conflict.

Transformational Leaders

Leaders who inspire and motivate followers to transcend their self-interests for the sake of the organization and can instigate significant changes.

Executive Symbols

Symbols or objects associated with positions of authority, often used to represent power, prestige, and the responsibilities of executives.