The following are some of the shortcomings of the IRR method except:
A) IRR is conceptually easy to communicate
B) Projects can have multiple IRRs
C) IRR method cannot distinguish between a borrowing project and a lending project
D) It is very cumbersome to evaluate mutually exclusive projects using the IRR method

Question

Quizplus · Accepted Answer

The statement says "shortcomings of the IRR method EXCEPT," meaning we are looking for the option that is NOT a shortcoming. Option A states that IRR is conceptually easy to communicate, which is not a drawback of the method. The other options, B, C, and D, are all valid shortcomings of the IRR method.

The Following Are Some of the Shortcomings of the IRR