Which of the below is NOT a weakness of the internal rate of return criterion fo

Question

Which of the below is NOT a weakness of the internal rate of return criterion for evaluating capital budgeting projects?

Select one:

a. It could lead to multiple solutions leaving it unclear which value to use.

b. It doesn’t provide a dollar measure of the value created by the project so it is difficult to use it to measure a project’s impact on the value of the company.

c. It doesn’t provide a valid accept/reject rule for mutually exclusive projects.

d. It doesn’t provide a valid accept/reject rule for stand-alone projects.

Explanation / Answer

Which of the below is not a weakness of internal rate of return criteria for evaluating capital budgeting projects?

d.) It doesn't provide a valid accept /reject rule for stand-alone projects.

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