Multiple internal rates of return can occur when there is (are) ____.
A) large abandonment costs at the end of a project's life
B) a major shutdown and rebuilding of a facility sometime during its life
C) more than one sign change in the pattern of cash flows over a project's life.
D) All of these are correct

Question

Quizplus · Accepted Answer

Multiple internal rates of return can occur when there are unconventional cash flows, meaning the cash flow pattern includes more than one sign change. This can happen in scenarios such as large abandonment costs, major shutdowns and rebuilds, or any situation where the cash flow pattern switches from positive to negative, or vice versa, more than once.

Multiple Internal Rates of Return Can Occur When There Is