Technical problems associated with the internal rate of return include:

A) the possibility of multiple IRRs, which rarely present practical difficulties.
B) the assumption that all cash flows are reinvested at the IRR.
C) Neither of the above
D) Both of the above

Internal Rate of Return

The discount rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.

Multiple IRRs

The situation where a project has more than one internal rate of return, occurring due to unconventional cash flows.

Reinvestment Assumption

The theory that cash flows will be reinvested at a constant rate, often used in financial modeling.