Project T has the following set of cash flows: When evaluating Project T using an IRR technique,what problem will arise?
A)Projects cannot have negative cash flows in any year other than year 0.
B)The projects IRR is impossible to determine.
C)The project will have multiple IRRs.
D)No problem should arise.

Question

Project T has the following set of cash flows:  When evaluating Project T using an IRR technique,what problem will arise?
A)Projects cannot have negative cash flows in any year other than year 0. 
B)The projects IRR is impossible to determine. 
C)The project will have multiple IRRs. 
D)No problem should arise.

Quizplus · Accepted Answer

Project T is exhibiting non-conventional cash flows, which means the project has both negative and positive cash flows. This can lead to the possibility of multiple IRRs, making it difficult to determine the IRR using traditional techniques.

Project T Has the Following Set of Cash Flows