Question

select one disadvantage of irr as a capital budget method.

it does not account for net present value.

it can get more complicated if there are negative cash flows.

is useful for comparing projects, but not for evaluating single project in isolation.

it focuses excessively on the cost of capital, compared to other methods.

Explanation:

1. Analyze Option 1: IRR is related to NPV (they are connected in capital budgeting), so "It does not account for net present value" is incorrect.
2. Analyze Option 2: When there are negative cash flows (non - conventional cash flows), IRR can have multiple solutions or be more complex to calculate, which is a known disadvantage of IRR.
3. Analyze Option 3: IRR can be used to evaluate a single project in isolation (by comparing with the cost of capital), so this statement is wrong.
4. Analyze Option 4: IRR does not focus excessively on the cost of capital compared to other methods; in fact, NPV is more directly related to the cost of capital in some aspects, so this is incorrect.

Answer:

B. It can get more complicated if there are negative cash flows.