The internal rate of return is likely to lead to incorrect decisions.
A) True
B) False
C) Uncertain

Name: The internal rate of return is likely to lead to incorrect decisions. A) True B) False C) Uncertain
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The internal rate of return assumes that cash inflows can be reinvested at the same rate of return which is not often the case. This can lead to incorrect decisions as it overstates the profitability of investments. Therefore, the statement is true.

The Internal Rate of Return Is Likely to Lead to Incorrect