IRR is a not a reliable indicator of whether a project should be acc.pdf
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The internal rate of return (IRR) is not a dependable criterion for project acceptance under certain conditions, including negative initial cash flows, mutual exclusivity with varying investment sizes, zero cash flows during the investment period, cash inflows occurring after the payback period, and non-conventional cash flows.
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IRR is a not a reliable indicator of whether a project should be acc.pdf
- 1. IRR is a not a reliable indicator of whether a project should be accepted or not ifA.The initial cash flow is negative.B.The investment is mutually exclusive with another investment of a different size.C. One of the time periods within the investment period has a cash flow equal to zero.D. The investment has cash inflows that occur after the required payback period.E.The cash flows are conventional.