Two Key Weaknesses of the Internal Rate of Return Rule

question 70

Multiple Choice

Two key weaknesses of the internal rate of return rule are the:

• A)arbitrary determination of a discount rate and failure to consider initial expenditures.
• B)failure to correctly analyze mutually exclusive projects and the multiple rate of return problem.
• C)failure to consider all cash flows and the multiple rate of return problem.
• D)failure to consider initial expenditures and failure to correctly analyze mutually exclusive projects.
• E)failure to correctly analyze mutually exclusive projects and the lack of clear-cut decision rule.

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