Which of the Following Is Considered to Be a Deficiency

question 79

Multiple Choice

Which of the following is considered to be a deficiency of the IRR?

• A) It fails to properly rank capital projects.
• B) It could produce more than one rate of return.
• C) It fails to utilize the time value of money.
• D) It is not useful in accounting for risk in capital budgeting.

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Definitions:

Specific Performance

A legal remedy requiring a party to fulfill their exact obligations under a contract, rather than simply providing monetary damages for failure to do so.

Lien

A legal right or claim against a property by a creditor to ensure the payment of a debt.

Rescission

The revocation of a contract or agreement.

Damages

Monetary compensation required to be paid as a result of loss or injury due to a breach of contract or a tort.