There exists an IRR solution for each time the direction of cash flows associated with a project is interrupted, that is, each time outflows change to inflows.

Question

Quizplus · Accepted Answer

This statement is true. The internal rate of return (IRR) is a metric used to evaluate the profitability of a project, and it takes into account the timing and amount of cash flows associated with the project. Whenever the direction of cash flows changes (i.e. from outflows to inflows), it creates a new set of cash flows that can be analyzed separately for their IRR. Therefore, there exists an IRR solution for each time the direction of cash flows associated with a project is interrupted.

There Exists an IRR Solution for Each Time the Direction