What are the limitations of the internal rate of return method of investment appraisal?

The limitations internal rate of return method of investment appraisal :- 1. The calculations process is tedious if there are more than one cash outflow interspersed between the cash inflows, there can be multiple IIR , the interpretation which is difficult. 2. The IIR approach creates a peculiar situation if we compare two projects with different inflow/outflow patterns. 3. It is assumed that under this method all the future cash inflow of a proposal are reinvested at a rate equal to the IIR. It is ridiculous to imagine that the same firm has ability to reinvest the cash flow at a rate equal to IIR. 4. It is mutually exclusive project are considered as investment options which have considerably different cash outlays. A project which a larger fund commitment but lower IIR contributes more in terms of absolute NPV and increases the shareholders wealth. In such situations decesion based only on IIR criterion may not be correct.