Question

What is the primary advantage of using the IRR as a criterion for project selection and performance evaluation?

a.

It is based on account period averages

b.

It relies on accounting metrics

c.

It has the natural interpretation as the break-even return for the project

d.

It considers only the return on investment (ROI)

Answer: (c).It has the natural interpretation as the break-even return for the project Explanation:The primary advantage of using the IRR as a criterion for project selection and performance evaluation is that it has the natural interpretation as the break-even return for the project.

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Q. What is the primary advantage of using the IRR as a criterion for project selection and performance evaluation?

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