Which One of the Following Is True for the Internal

Multiple Choice

Which one of the following is true for the internal rate of return (IRR) method?

A) It assumes cash proceeds during the life of a project can be reinvested to earn the same rate of return as the weighted-average cost of capital.
B) Depending on the pattern of after-tax cash flows, multiple IRRs for a given proposed investment are possible.
C) IRRs of multiple projects are additive (that is, can be added together) .
D) It can be used to make optimal decisions regarding mutually exclusive investment projects.
E) It makes it easy to incorporate multiple costs of capital.