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D is corrent.  The internal rate of return (IRR) of a project is the discount rate at which the present value of the project’s cash flows will exactly equal its initial investment (i.e., net present value = $0). Under this method, the cash flow over the entire life of the project, as well as the time value of money as expressed in a time value of money factor (TVMF) are taken into consideration.  The accounting rate of return (ARR) computes an approximate rate of return, but ignores the time value of money. It is computed as follows:


A is incorrect because the internal rate of return does not take into account recognition of the project’s salvage value.
A is incorrect because the internal rate of return does not take into account recognition of the project’s salvage value.
C is incorrect because while the internal rate of return does emphasize cash flows it does not take into account recognition of the project’s salvage value.