Which of the following is a disadvantage of the internal rate of return criterion? Select one: a. It is not a true rate of return. b. It uses an arbitrary benchmark cutoff rate. c. It ignores time value of money, cash flows, and market values. d. It cannot be used to rank independent projects. e. It may lead to incorrect decisions when comparing mutually exclusive investments.
Which of the following is a disadvantage of the internal rate of return criterion? Select one: a. It is not a true rate of return. b. It uses an arbitrary benchmark cutoff rate. c. It ignores time value of money, cash flows, and market values. d. It cannot be used to rank independent projects. e. It may lead to incorrect decisions when comparing mutually exclusive investments.
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 2QTD
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Which of the following is a disadvantage of the
Select one:
a. It is not a true rate of return.
b. It uses an arbitrary benchmark cutoff rate.
c. It ignores time value of money , cash flows, and market values.
d. It cannot be used to rank independent projects.
e. It may lead to incorrect decisions when comparing mutually exclusive investments.
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