The possibility that more than one discount rate will make the NPV of an investment zero is called the ___________ problem.
A) Net present value profiling.
B) Operational ambiguity.
C) Mutually exclusive investment decisions.
D) Issues of scale.
E) Multiple rates of return.

Question

Quizplus · Accepted Answer

The multiple rates of return problem occurs when more than one discount rate can make the net present value (NPV) of an investment zero, typically arising in projects with unconventional cash flows (i.e., cash flow signs change more than once).

The Possibility That More Than One Discount Rate Will Make