Which of the following statements related to the internal rate of return (IRR)are correct?
I.The IRR method of analysis can be adapted to handle non-conventional cash flows.
II.The IRR that causes the net present value of the differences between two project's cash flows to equal zero is called the crossover rate.
III.The IRR tends to be used more than net present value simply because its results are easier to comprehend.
IV.Both the timing and the amount of a project's cash flows affect the value of the project's IRR.
A)I and II only
B)III and IV only
C)I, II, and III only
D)II, III, and IV only
E)I, II, III, and IV

Question

Quizplus · Accepted Answer

All statements about the internal rate of return (IRR) are correct. IRR can indeed be adapted for non-conventional cash flows, the crossover rate is defined as stated, IRR's ease of understanding often makes it more popular than NPV, and both the timing and amount of cash flows influence the IRR value.

Which of the Following Statements Related to the Internal Rate