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.

---

Definitions:

Cognitive Therapy

A type of psychotherapy that focuses on changing negative patterns of thought to alter unwanted behavior patterns or treat mood disorders such as depression.

Systematic Desensitization

A therapeutic method used to reduce phobia or anxiety through gradual exposure to the feared object or situation combined with relaxation techniques.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Unconditional Positive Regard

A concept in psychology, particularly within humanistic therapy, where the therapist offers the client acceptance and support regardless of what the client says or does.