Why does it say the IRR rule can be misleading when decide the mutually exclusive projects?
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WhydoesitsaytheIRRrulecanbemisleadingwhendecidethemutuallyexclusiveprojects?WhydoesitsaytheIRRruleca
Why does it say the IRR rule can be misleading when decide the mutually exclusive projects?
Why does it say the IRR rule can be misleading when decide the mutually exclusive projects?
Why does it say the IRR rule can be misleading when decide the mutually exclusive projects?
There could be more than one positive IRR if the cash flows in and out more than once(e.g.:-100,50,50,-50,50).You can not decide on which one to take.NPV method is most of the time a preferred one.By NPV method you may find out that some positive IRRs have negative NPV.
Mutually exclusive projects may all have positive IRR.So that's why IRR method could be misleading and you have to rely on the NPV method.
Why does it say the IRR rule can be misleading when decide the mutually exclusive projects?
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