How many IRRs are possible for the following set of cash flows? CF₀ = −$1,000,C₁ = $500,C₂ = −$300,C₃ = $1,000,C₄ = $200. A) One B) Two C) Three D) Four

Question

Quizplus · Accepted Answer

There can be a maximum of three IRRs for this set of cash flows. This is because there are three changes in the sign of the cash flows (from negative to positive or vice versa). Each change in the sign of the cash flows can result in one IRR. Therefore, there can be a maximum of three IRRs for this set of cash flows.

How Many IRRs Are Possible for the Following Set of Cash