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Author Question: Perhaps the greatest disadvantage of using the IRR method to evaluate investment opportunities is (Read 49 times)

jace

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on: Apr 25, 2021

Question 1

Los Angeles Lumber Company (LALC) is considering a project with a cost of $1,000 at Time = 0 and inflows of $300 at the end of Years 1-5. LALC's cost of capital is 10%. What is the project's modified IRR (MIRR)?
◦ 10.0%
◦ 12.9%
◦ 15.2%
◦ 18.3%
◦ 20.7%

Question 2

Perhaps the greatest disadvantage of using the IRR method to evaluate investment opportunities is
◦ dealing with uncertain cash flows from the project.
◦ the assumption that all cash flows from the project will be reinvested at the IRR.
◦ the inability to calculate most IRRs without a computer.
◦ the need to compare IRR with the firm's cost of capital which cannot be estimated precisely.
◦ the fact that the technique does not account for risk.
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by jace on Apr 25, 2021

mjenn52

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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jace

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Reply 2 on: Apr 25, 2021
YES! Correct, THANKS for helping me on my review

flexer1n1

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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