The problem of multiple IRRs can occur when:
A) there is only one sign change in the cash flows.
B) the first cash flow is always positive.
C) the cash flows decline over the life of the project.
D) there is more than one sign change in the cash flows.

Question

Quizplus · Accepted Answer

The problem of multiple IRRs arises when there is more than one sign change in the cash flows, as this creates the possibility of calculating more than one internal rate of return for the same project.

The Problem of Multiple IRRs Can Occur When