The internal rate of return is likely to lead to incorrect decisions.

Name: The internal rate of return is likely to lead to incorrect decisions.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The internal rate of return (IRR) can be misleading as it assumes that cash flows are reinvested at the same rate as the IRR. In reality, this may not be the case, leading to incorrect decisions regarding investments. Additionally, the IRR may not provide a clear picture of the magnitude of the investment or the cash flows involved.

The Internal Rate of Return Is Likely to Lead to Incorrect