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Describe the problems with using the IRR statistic to evaluate capital budgeting projects. What is the...

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Finance

Describe the problems with using the IRR statistic toevaluate capital budgeting projects. What is the solution to theseproblems?

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4.2 Ratings (519 Votes)
IRR is the rate at which discounted cash inflows are equal to discounted cash outflows In other words it is the rate which discounts the cash flows to zero There are many problems with using IRR such as 1The calculation of IRR is very difficult    See Answer
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Describe the problems with using the IRR statistic toevaluate capital budgeting projects. What is the solution to theseproblems?

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