Which of the following statements is incorrect regarding the internal rate of return for a project? Select one: 1. Rather than asking if a project has a positive NPV, many companies prefer to ask whether it offers a higher return than shareholders might expect when investing in the capital market. 2. Yield is generally defined as the discount rate that would result in a NPV of zero. This is known as the internal rate of return or IRR. The project is attractive if the IRR exceeds the opportunity cost of capital. 3. There are some difficulties in using the internal rate of return rule. Be careful using IRR when (1) the first few cash flows are positive, (2) there is more than one change in the sign of the cash flows, or (3) you need to choose between two mutually exclusive projects. 4. Neither option is wrong