The internal rate of return does not take into account the
A)explicit risk of the net cash flows
B)magnitude of cash flows over the project's life
C)net investment
D)timing of cash flows over the entire life of a project

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) does not explicitly account for the risk associated with the net cash flows. It focuses on the rate at which the net present value of cash flows equals zero, without adjusting for risk factors.

The Internal Rate of Return Does Not Take into Account