What are the redeeming qualities and shortcomings of the internal rate of return (IRR) method in...

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Finance

What are the redeeming qualities and shortcomings of theinternal rate of return (IRR) method in capital budgetinganalysis?
Explain conceptually in detail what the weighted average cost ofcapital (WACC) is and the role it plays in capital budgeting.
Explain why the opportunity cost and net working capital (NWC)are included, while the financing costs and sunk costs are NOT inthe cash flow analysis.

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1 The redeeming qualities of IRR in capital budgeting analysis are that this method can be used for easy comparison purposes In case of capital budgeting analysis if for a project IRR is greater than cost of capital then the projected will be accepted and if IRR is less than the cost of capital then project will be rejected Comparison of IRR and cost of capital is easy and highly See Answer

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