Given a particular set of project cash flows, which of the following statements is correct?
A)There can be only one NPV for the project
B)There can be only one IRR for the project
C)There can be more than one NPV for the project
D)There can be only one profitability index for the project

Question

Quizplus · Accepted Answer

There can be more than one NPV for the project due to the possibility of multiple discount rates leading to different net present values. This is especially true if there are non-conventional cash flows (i.e. multiple sign changes). IRR and profitability index are unique to a project, and there cannot be more than one value for each.

Given a Particular Set of Project Cash Flows, Which of the Following