Which is true about the internal rate of return? (pick one)

• easier for managers to comprehend than the net present value.
• extremely accurate even when cash flow estimates are faulty.
• ignored by most financial analysts.
• used primarily to differentiate between mutually exclusive projects.

What are the two fatal flaws about the IRR (pick two):

• arbitrary determination of a discount rate
• multiple rate of return problem.
• failure to consider initial expenditures
• failure to correctly analyze mutually exclusive investment projects.