Internal rate of return (IRR) as a project-ranking tool

In his recent paper, Torries (1998a) came to the defense of the much-criticized internal rate of return (IRR) as a project evaluation and ranking criterion. Torries also offered his own approach to the IRR-based project ranking, which he believes to be a more practical alternative to the conventional incremental-ranking approach, which Torries considers to be misleading. In an earlier paper (Hajdasinski, 2000), the author demonstrated that Torries' arguments vindicating the IRR concept are invalid. This paper provides logical and numerical evidence that the same is also true with regard to Torries' IRR based project-ranking approach.