Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger

Exercise 49

Which of the following is not true regarding the IRR
A) The IRR is the interest rate that sets the present value of a project's cash inflows equal to the present value of the project's cost.
B) The IRR is the interest rate that sets the NPV equal to zero.
C) The popularity of IRR may be attributable to the fact that it is a rate of return, a concept that is comfortably used by managers.
D) If the IRR is greater than the required rate of return, then the project is acceptable.
E) The IRR is the most reliable of the capital budgeting methods.