1.) In class and in chapter 8 several limitations were discussed when using IRR to make investment decisions. Select all the statements that are criticisms/limitations that apply when using IRR.

A.) When choosing between 2 projects, the project with the higher IRR may not have the higher NPV.

B.) If the cash flow stream has more than 1 sign change, then there are more than 1 possible IRRs. It is unclear which of them should be used.

C.) Most firms do not use IRR. It is a rarely used decision tool.

D.) IRR does not inform managers of how quickly an investment will be recovered.

2.) The IRR for a project is the cost of capital for that project.

A.) True

B.) False