Which of the following is an advantage of internal rate of return method?
A) Sum of IRRs of individual projects gives an IRR of a combination or portfolio of projects.
B) The percentage returns computed under the IRR method are easy to understand and compare.
C) It can be expressed as a unique number.
D) It can be used when the required rate of return varies over the life of a project.

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) method provides a percentage return on investment, which is straightforward for decision-makers to understand and compare with the required rate of return or other investment opportunities. This ease of interpretation is a significant advantage of using IRR.

Which of the Following Is an Advantage of Internal Rate