Which of the Following Statements Is CORRECT

question 21

Multiple Choice

Which of the following statements is CORRECT?

• A) One defect of the IRR method is that it does not take account of the time value of money.
• B) One defect of the IRR method is that it does not take account of the cost of capital.
• C) One defect of the IRR method is that it values a dollar received today the same as a dollar that will not be received until sometime in the future.
• D) One defect of the IRR method is that it assumes that the cash flows to be received from a project can be reinvested at the IRR itself, and that assumption is often not valid.
• E) One defect of the IRR method is that it does not take account of cash flows over a project's full life.