There are three problems associated with IRR as a decision rule.
Answer
Reinvestment, Scale and Timing
Tags
#reading-7-discounted-cashflows-applications
Question
There are three problems associated with IRR as a decision rule.
Answer
?
Tags
#reading-7-discounted-cashflows-applications
Question
There are three problems associated with IRR as a decision rule.
Answer
Reinvestment, Scale and Timing
If you want to change selection, open document below and click on "Move attachment"
Subject 1. NPV and IRR ater than the discount rate used (WACC) and reject those in which the IRR is less than the discount rate. An IRR greater than the WACC suggests that the project will more than repay the capital costs (opportunity costs) incurred.
<span>There are three problems associated with IRR as a decision rule.
Reinvestment
The IRR is intended to provide a single number that represents the rate of return generated by a capital investment. As such, it is an easy number
Summary
status
not learned
measured difficulty
37% [default]
last interval [days]
repetition number in this series
0
memorised on
scheduled repetition
scheduled repetition interval
last repetition or drill
Details
No repetitions
Discussion
Do you want to join discussion? Click here to log in or create user.