A project will have more than one IRR if:
A) the IRR is positive.
B) the IRR is negative.
C) the NPV is zero.
D) the cash flow pattern exhibits more than one sign change.
E) the cash flow pattern exhibits exactly one sign changE.

Question

Quizplus · Accepted Answer

A project will have more than one IRR if the cash flow pattern exhibits more than one sign change. This is because IRR is the discount rate at which the NPV of the cash flows equals zero. If there are multiple sign changes in the cash flow pattern, there can be multiple discount rates at which the NPV equals zero, resulting in multiple IRRs.

A Project Will Have More Than One IRR If