Economics · Capital Budgeting
The managerial preference for the Internal Rate of Return (IRR) method in capital budgeting primarily arises because:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It guarantees consistency with wealth maximization
- 2It eliminates the impact of risk adjustments
- 3It expresses investment performance in percentage terms that are easier to interpret✓
- 4It ensures the lowest weighted average cost of capital
Correct answer
It expresses investment performance in percentage terms that are easier to interpret
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