Drawbacks Of Irr In Capital Budgeting
Capital budgeting necessitates evaluating projects’ potential returns to determine their viability. Selecting an appropriate method is crucial, and the Internal Rate of Return (IRR) is commonly used. However, IRR comes with its drawbacks. One notable disadvantage arises when dealing with mutually exclusive projects, where prioritizing those with higher IRRs can lead to suboptimal investment decisions … Read more