Page 356 - F2 - MA Integrated Workbook STUDENT 2018-19

Chapter 14

5.2 Advantages and disadvantages of IRR

 Considers the time value of  Complicated to calculate

money
 Not a measure of absolute
 Relative measures therefore profitability
easy to compare investments
 Only provides an estimate
 Uses cash flow

 Considers the whole life of

the project

 Should maximise shareholder

wealth

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