It was mentioned that "When comparing two projects of differing sizes, the Net Present Value...

50.1K

Verified Solution

Question

Accounting

It was mentioned that "When comparing two projects of differing sizes, the Net Present Value technique is inefficient. It gives a dollar response, but the magnitude of the Net Present Value output is affected mainly by the input size."

Why do you think the internal rate of return (IRR) method is not the best calculation to use when mutually exclusive projects are under consideration in the capital project decision?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students