Irr method for evaluating a capital project


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Question 1: If a company used the Accounting Rate of Return to evaluate all the capital projects how do you account for one disadvantage in using this method in that this is not a rate of return, but a ratio of two accounting numbers. How do you account for the fact that this method ignores the time value of money?

Question 2: What are some of the disadvantages of just using the IRR method for evaluating a capital project?

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Finance Basics: Irr method for evaluating a capital project
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