$2.$ Jody Matheny, CAIA is examining methods to evaluate various project alternatives within her capital budgeting

responsibilities. Among the various analytical approaches, Matheny has settled on using an IRR approach. Which of

the following statements regarding IRR is most accurate?

Group of answer choices

An investment with a large negative IRR is very sensitive to distant cash flows, and IRR does not always rank investments accurately.

IRR allows for different reinvestment rates over the life of the project, and can only have one solution, simplifying comparisons between projects.

In cases where there is a large positive IRR, the magnitude of the longest$-$term cash flow in the project's life will have a large impact on the IRR.

IRR is especially useful in ranking the relative performance of multiple investments.