A Major Limitation of the Internal Rate of Return Method

question 115

Multiple Choice

A major limitation of the internal rate of return method is:

• A) Failure to measure time value of money.
• B) Failure to measure results as a percent.
• C) Failure to consider the payback period.
• D) Failure to reflect varying risk levels over project life.
• E) Failure to compare dissimilar projects.

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Definitions:

Valid Deductive Argument

An argument where, if the premises are true, the conclusion must also be true, demonstrating a logical structure.

Conclusion

The statement within an argument that is backed up by other statements.

False

Not true or correct; erroneous.

Deductively Valid

A characteristic of an argument where if the premises are true, the conclusion must also be true.