The internal rate of return tends to be:
A) easier for managers to comprehend than the net present value.
B) extremely accurate even when cash flow estimates are faulty.
C) ignored by most financial analysts.
D) used primarily to differentiate between mutually exclusive projects.

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is often easier for managers to understand than the net present value (NPV) because it provides a single percentage rate that gauges the profitability of a project, making it more intuitive for decision-making.

The Internal Rate of Return Tends to Be