Since IRR supposes the reinvestment of the funds at the same rate the distance between cashflows can make a substantial difference
Tags
#reading-7-discounted-cashflows-applications
Question
Why is Timing of cashflows an issue with IRR?
Answer
?
Tags
#reading-7-discounted-cashflows-applications
Question
Why is Timing of cashflows an issue with IRR?
Answer
Since IRR supposes the reinvestment of the funds at the same rate the distance between cashflows can make a substantial difference
If you want to change selection, open document below and click on "Move attachment"
Subject 1. NPV and IRR usive projects of greatly differing scale: one that requires a relatively small investment and returns relatively small cash flows, and another that requires a much larger investment and returns much larger cash flows.
<span>Timing
The other situation in which IRR is likely to contradict NPV is when there are two mutually-exclusive projects whose cash flows are timed very differently: one that receives its
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.