The limitations of IRR can be any three of the following: Relating to Lending or Borrowing, with some cashflows, the NPV of the project increases as the discount rate increases Long lived projects decided on the basis of IRR could lead to misleading calculations Multiple Rates of Return is possible as some cashflows can generate NPV = 0 at two different discount rates In mutually Exclusive Projects, IRR sometimes ignores the magnitude of the project Timing of making the investment can be identified through IRR calculations